Four years ago, the biofuels industry was boorishly introduced to the theory of indirect land use change, or ILUC. Timothy Searchinger&rsquo;s now infamous article in the February 2008 edition of Science magazine boldly suggested increased corn ethanol production in the United States would lead to massive deforestation and conversion of grassland in nations halfway around the world. These hypothetical land conversions, he proffered, would release large amounts of stored carbon, indirectly making ethanol&rsquo;s carbon footprint twice as bad as gasoline&rsquo;s.
We knew it was a crazy theory four years ago. But it seems even crazier today, as the understanding of ethanol&rsquo;s impact on land use has significantly progressed over the past four years. The scientific community has better data, improved modeling tools, and a better appreciation of the uncertainty and complexity involved in ILUC analysis. But, above all, they have the benefit of some experience and hindsight.
Real world data show that Searchinger was dead wrong in his predictions that ethanol expansion would cause U.S. farmers to plant fewer soybean acres, or that they would &ldquo;&hellip;directly plow up more forest or grassland.&rdquo; In fact, soybean acreage increased to record levels in 2008, 2009 and 2010. And a recent report from USDA shows U.S. grassland has increased to its highest level since 1964 and forestland is at its highest point since 1978. Meanwhile, total U.S. cropland has dropped to its lowest level since USDA began collecting data in the 1940s. From 2002 to 2007 alone, cropland dropped by 34 million acres, or nearly 8 percent (incidentally, ethanol production tripled during that period).
Empirical data also prove wrong Searchinger&rsquo;s notion that &ldquo;higher prices triggered by biofuels will accelerate forest and grassland conversion&rdquo; in South America. Data from Brazil&rsquo;s Ministry of Science and Technology show dramatic reductions in Amazon deforestation over the past five years. In fact, 2010 saw the lowest level of deforestation since the government began collecting the data in 1988.
Academics have recently begun to examine this empirical data to scientifically test the Searchinger hypothesis. One recent study, led by Michigan State University Professor Bruce Dale, used a &ldquo;bottom-up, data-driven, statistical approach,&rdquo; to determine that biofuel production in the United States through 2007 &ldquo;probably has not induced any indirect land use change.&rdquo; Researchers at Oak Ridge National Laboratory similarly found &ldquo;&hellip;minimal to zero indirect land use change was induced by use of corn for ethanol over the last decade.&rdquo;&nbsp; The Oak Ridge findings are based on a rigorous examination of empirical data from the 2001-&lsquo;08 time period, a span in which U.S. ethanol production more than quadrupled.
While methods to empirically verify the past occurrence and magnitude of ILUC continue to improve, the economic models used to predict potential future ILUC also are being refined. For instance, recent updates and improvements to Purdue University&rsquo;s GTAP model resulted in a dramatic reduction of predicted ILUC emissions. In the latest Purdue analysis, the corn ethanol ILUC factor was found to be 14 grams CO2 equivalent per megajoule (g/MJ), compared to the value of 30 g/MJ used by California regulators and the EPA. A 2011 analysis conducted for the European Commission by the International Food Policy Research Institute placed the corn ethanol ILUC factor at 10 g/MJ. Contrasting these latest estimates with Searchinger&rsquo;s outrageous value of 104 g/MJ shows his worst-case analysis was simply out of touch with reality.
Unfortunately, advancements in the science of ILUC have not been mirrored by improvements in biofuels regulations that penalize ethanol for hypothetical ILUC emissions. California and EPA continue to rely on outdated and inflated estimates of ILUC, to the detriment of our industry. As highlighted by U.C. Berkeley economist David Zilberman at a recent Coordinating Research Council workshop (which RFA co-sponsored), the current regulatory treatment of ILUC is &ldquo;pretentious,&rdquo; &ldquo;shifts attention from real problems,&rdquo; and &ldquo;creates uncertainty for investors.&rdquo; We couldn&rsquo;t agree more. And that&rsquo;s why RFA continues to push for improvements in both the science and the policy of ILUC. Author: Bob Dinneen President and CEO of the Renewable Fuels Association (202) 289-3835

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The ILUC Debate,  Four Years Later

Have you ever wondered what really drives the ethanol industry? Given the challenges it has faced over the years, it would seem as though it should have been dead and buried long ago. Thirty-five years later it&rsquo;s still moving forward.
The progress can&rsquo;t be credited to overwhelming consumer demand, ease of market penetration, lack of competition, or any of the normal things that propel most industries to success. In fact, just about every roadblock imaginable has been laid before this industry.
I have concluded that it&rsquo;s pure passion. Passion for what we all believe to be for the greater good and passion for a cause has a profound effect on so many people living in rural communities and the country as a whole. So just below the surface of making a profit, there is an abiding sense of honor, pride and commitment that few other industries possess, or frankly even need to succeed.
I believe that without that sense of pride and passion, we would have long ago been simply another chapter in the energy history book. Instead, we&rsquo;re making history, carving new innovative pathways to the world&rsquo;s energy future. What began as a plan by President Carter to appease the public outrage over the Arab oil embargo, has become a national commitment that has spread globally. I doubt when President Carter called Archer Daniels Midland in 1977 and asked them to consider producing ethanol, he could have imagined what the real outcome of that call would be.
Those who have witnessed the grand opening of an ethanol plant and seen the pride well up in the eyes of farmers who struggled, sometimes for years, to find funding to build the plant, understand what I mean when I use the term passion. In the formative years of this industry, the decision to build wasn&rsquo;t made in the boardroom on the 50th floor, it was made in the local cafe over coffee and donuts. It wasn&rsquo;t a decision based on bottom line profits, it was a decision predicated on improving the lot of those in the community and building a future for the next generation to help keep them on the farm.
There are few industries indeed, that have survived and prospered solely on pride, passion and unyielding determination. Today&rsquo;s ethanol industry stands as a monument to those people who had the vision, the commitment and, yes, the passion to forge ahead when the odds were so stacked against them.
As we enter a new era of public policy for this industry, I am confident that it will not only survive, but will prosper like never before and move to the next level of excellence. The billions of dollars that America&rsquo;s ethanol industry pumps into the economy and the contribution it makes to energy security and the wellbeing of rural communities will never be overshadowed by a few self-serving naysayers.&nbsp;
The Renewable Fuels Association&rsquo;s National Ethanol Conference in Orlando, Fla., Feb. 22-24,will once again demonstrate to the world the vibrancy and passion of the ethanol industry. We&rsquo;ll see you there.
That&rsquo;s the way I see it!
&nbsp;
Author: Mike Bryan Chairman, BBI International mbryan@bbiinternational.com

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The Power of  Pride and Passion

In need of a morale booster? Mike Bryan&rsquo;s column this month is a good exposition of the passion, drive and perseverance that the ethanol industry has exhibited over the years. Building this industry has never been an easy sell with the public, he reminds us.
There may be a trend emerging in the ethanol industry to communicate with and engage the general public more effectively. In the past several months, I have noticed more ethanol plant managers are being quoted in their regional daily papers. From the stories I see, I can&rsquo;t tell if the contact was initiated by the newspaper or the plant managers, but it is effective. Any newspaper worth its salt will jump at the chance to localize the national news. When an issue comes up that lends itself to comment, I urge you to contact your local newspaper and explain that you&rsquo;d like to discuss the issue and how it impacts your business and the community. Take advantage of our industry organizations, too, to get some background information and facts to use. And be honest&mdash;if the reporter asks a question you don&rsquo;t know the answer to, simply say you&rsquo;d rather not comment since you aren&rsquo;t well-versed on that topic.
Mike Jerke, general manager of the Benson, Minn., ethanol plant, took a different approach. When he saw an article that troubled him about an organization&rsquo;s stance, he wrote to the head of the organization. The letter is brief, courteous but pointed. We share that letter below with the readers of Ethanol Producer Magazine.
Susanne Retka Schill, Editor sretkaschill@bbiinternational.com
&nbsp;
&nbsp;
LETTER 
Mike Jerke, general manager of Chippewa Valley Ethanol shared the following letter he sent to Rob Green, executive director of the National Council of Chain Restaurants, saying,&nbsp; &ldquo;It&rsquo;s one thing to be beaten up by Big Oil, it&rsquo;s another to have Appleby&rsquo;s, Chilis, McDonalds, IHOP and Cracker Barrel pile on.&rdquo; He added that he has not yet gotten answers to the questions he poses. Dear Mr. Green, I read with concern the article by Sasha Orman on the Food and Drink Digital website, &ldquo;National Council of Chain Restaurants Takes on Ethanol,&rdquo; regarding your association&rsquo;s position on ethanol from corn. I would appreciate your expounding on the quote attributed to you in the article that states in part, &ldquo;These subsidies have artificially increased the price of corn, which in turn has driven up costs for restaurants and the customers they serve.&rdquo;
What costs, specifically, are higher for the restaurants you serve?
Recognizing that ethanol now displaces 10 percent of the gasoline supply that would otherwise be derived from petroleum sources, studies have estimated that the average American household is saving approximately $200 to $400 per year because of ethanol.&nbsp; That savings represents dollars that can be spent at the establishments that make up your organization.
I was especially troubled by the statement in the article that, &ldquo;&hellip;the organization (NCCR) has now vowed to devise a sustained effort to address these issues and fight for reformed policies, especially once the current VEETC and the tariff expire at the end of December.&rdquo; [Emphasis added.] If this is an accurate description of the NCCR&rsquo;s focus there must have been a significant effort to define and quantify the perceived threat. Once again, I would appreciate your sharing what the cost to the restaurant industry is that you attribute to corn-derived ethanol.
As misguided as your policy position on ethanol is, your position on commodity speculation is right on. I would submit that is the real issue.&nbsp;
Chippewa Valley Ethanol Co. is owned by 900-plus members that have a direct or indirect connection to production agriculture. They will, I am sure, be keenly interested in why the National Council of Chain Restaurants, which represents many eating establishments they frequent, has taken such a strong position against farming, national energy independence and rural economic development. Mike Jerke General Manager Chippewa Valley Ethanol Company Benson, Minn.

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Effective Outreach

What better company to invest in waste-to-biofuels ventures than one that deals with waste? In November, Waste Management Inc. closed an equity investment in Fulcrum BioEnergy Inc. and agreed to provide a secured loan facility of up to $70 million in funding for the company&rsquo;s proposed Sierra BioFuels plant. A month later, Waste Management and EB Investments invested $15 million in Canadian funds (about $14.5 million) for a minority equity interest in Enerkem Alberta Biofuels L.P.
This isn&rsquo;t the first time Waste Management has partnered with these companies. Fulcrum BioEnergy, which is working to build a 10 MMgy municipal solid waste-to-ethanol facility near Reno, Nev., has entered into long-term feedstock agreements with Waste Management. Construction is underway and the plant is expected to begin production in the second half of 2013. The 36 MMly MSW ethanol plant Enerkem Inc. is building in Edmonton, Alberta, has also received equity investments from Waste Management in the past. That plant is expected to begin production in 2012. A second 10 MMly sorted MSW and wood residue ethanol plant, planned for Pontotoc, Miss., is under development.
Waste-to-ethanol isn&rsquo;t the only advanced technology Waste Management is supporting, Wes Muir, the company&rsquo;s director of corporate communications tells EPM. The company has two sustainability goals: doubling its renewable energy production by 2020 and investing in emerging technologies for managing waste. &ldquo;We have a very wide range of thermal, chemical and fermentation technology investments,&rdquo; Muir says. The company has a portfolio of nearly 30 investment projects, acquisitions and joint ventures working to recover materials and resources from waste, according to its 2011 sustainability report update. That includes Terrabon LLC, developer of a waste-to-fuel conversion technology that converts biomass to high-octane gasoline; InEnTec Inc., a waste gasification company that operates a commercial demonstration plant in Arlington, Ore.; and Agnion Energy Inc., which has research and development facilities in Germany to perfect its allothermal gasification technology that converts wood-based biomass into synthetic gas, Muir says. &mdash;Holly Jessen

The Enerkem Alberta Biofuels commercial facility is under construction in Edmonton.      

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Ethanol is one part of Waste Management's sustainability goals

Waste Not

One would think that a relatively easy way for governments to promote biofuels would be to tax biofuels less than fossil fuels&mdash;avoid lengthy debates on mandates and simply change the taxation structure in such a way that biofuels will have by far the competitive edge over fossil fuel. Unfortunately, it isn&rsquo;t that straightforward to create such a level playing field in the EU.
Problem 1: Not only is an adjustment needed between taxing fossil fuels and biofuels, but also to balance the fuel market between diesel and gasoline. Under existing EU law, member states need to respect minimum levels of fuel taxation. These EU minimum levels are different between diesel (33 eurocents per liter) and gasoline (36 eurocents per liter). Not a huge difference, but member states can play with the tax level to promote one over the other and also to willingly distort the internal market. For example, diesel/gasoline taxes in eurocents per litre in Luxemburg is 32/46, in Germany, 47/66, whereas in the UK, 66/66. The highest tax for gasoline is in the Netherlands (80 eurocents) which has a diesel tax of only 42. Clearly, there are several other taxes that influence the consumer&rsquo;s choice, but the fuel tax is decisive.
Problem 2: Changing the taxation structure at EU level seems often more difficult than changing the EU treaty. Several states see fiscal change as intervening in what is considered, deep down, a national prerogative. The UK is a case in point. Equalizing the tax level in the entire EU would help in obtaining a balanced fuel market and undoing competition distortion&mdash;something the UK could only support. But the fact that Europe is determining the level of taxation nationally (even if these are indirect taxes) is unpalatable for the Brits.
Problem 3: Some EU member states gain a lot of money by keeping taxes on fossil fuel artificially low with the purpose either to support the trucking sector through low diesel prices or to boost sales of diesel to nonresidents. Take Luxemburg (500,000 inhabitants) luring lorries to their country with low fuel taxes. The result is that the neighboring country, Germany (75 million inhabitants), is losing revenues big time by having a diesel tax 15 eurocents per liter higher. The weird thing is that Germany doesn&rsquo;t like the taxation proposal because the diesel car manufacturers, a major political force in Germany, fear loss of market share if taxes become more equal. Giving in to the car lobby means hundreds of millions of euros per year less tax income for the German state. The estimate is that for Luxemburg the extra income per capita is around 1,400 Euro per year.
The present energy taxation law results in perverse effects causing shortages of diesel, surpluses of gasoline, discrimination of biofuels when taxed as fossil fuels and loss of government income when taxes are unequal in neighboring countries. So, change is needed, but any substantial progress does not seem to be happening.&nbsp;
Since April, member states are trying to agree on a more balanced tax law. After a delay of more than a year before the bill was put to the member states, the Polish president of the EU spent most of the past six months derailing the proposal, because it runs counter to Poland&rsquo;s coal policy.
All hopes are now set for the first half of this year when the Danes hold the presidency. Even though a brand new government and not very experienced, the Danes want a pragmatic approach: Focus the law on what really will deliver a change in European transport fuel consumption by aligning taxation of diesel and gasoline and forget about all the other goodies, such as introducing a CO2-based tax, taxation on energy density or a higher tax on coal.
Such a pragmatic approach would resolve the perversities we are having with the present law. Even though it would not be the best possible outcome for biofuels in general, it would be still beneficial for ethanol in the long run. Fiscal equalization between fossil fuel will benefit gasoline and, hence, ethanol.

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A Pragmatic Approach  to Fuel Taxation

We are still at the beginning of the new year but, as expected, ethanol critics are wasting no time in attacking us. Last year, our opponents blocked our efforts to reform the blenders tax credit and open the transportation fuels market to true competition. Now they are focusing on the renewable fuel standard (RFS), which serves as a crucial support for the ethanol market.
The RFS was enacted by a bipartisan Congress as part of the 2005 Energy Policy Act, and expanded in 2007 under the Energy Independence and Security Act. The RFS has been the single most effective tool at producing the only large-scale, commercially viable alternative to gasoline refined from oil&mdash;ethanol. Today, just four years into what is defined as a 15 year plan, we are on target to reach the 15 billion gallon threshold from grain-based ethanol. And with a continued commitment to the RFS, we can achieve the 36 billion gallon goal with cellulosic and advanced biofuel.
But, we must stick to the plan. Abandoning the RFS now would be a step backward. It would put OPEC further in control of our economy and perpetuate our addiction to foreign oil&mdash;an addiction that has significantly impacted our national economy and our geopolitical standing. Over the last 40 years, we&rsquo;ve spent trillions of dollars importing oil, often from nations that are corrupt, politically unstable or outright hostile to U.S. interests. We have been at constant war in the Middle East for the past 20 years for access to oil, at a cost of untold trillions in taxpayer dollars, the loss of more than 6,000 soldiers and creation of a whole new class of wounded warriors, thousands of whom will need long-term care funded by our government.
The intent of Congress when it wrote the renewable fuel standard was to grow an American fuels industry that would help us break free from this addiction and its dire consequences. In fact, the RFS is the only national energy policy in place designed to reduce our dependence on foreign oil through the increased use of biofuel. We can accelerate our progress toward reaching the RFS through the widespread use of E15 and installation of flex-fuel pumps.
Moving the nation to E15 will create 136,000 new jobs and will reduce carbon emissions the equivalent of taking 1.35 million cars off the road&mdash;and reduce the need to import 7 billion gallons of oil a day. And, a full move to E15 will send the right signals to investors, creating the market that will drive the growth and commercialization of cellulosic ethanol&mdash;ethanol produced from biomass feedstock, such as citrus waste, wood waste or corn stover&mdash;which is nearing commercial viability. Today, several leading grain ethanol makers are nearing market-scale production for cellulosic ethanol and with the right market signals we will continue to see more producers enter the market.
The cellulosic ethanol industry will create significant jobs for rural communities, help deliver energy security to the U.S. and reduce harmful emissions in the air. The U.S. DOE&rsquo;s Argonne National Laboratory found that cellulosic ethanol promises to reduce carbon emissions by 86 percent compared to gasoline.
While it may take some time to bring all the pieces together, we are well on our way to reaping the economic and national security benefits of a strong, domestic biofuels industry. A strong commitment to the RFS and an open fuels market will strengthen our energy security, generate more U.S. jobs that can&rsquo;t be outsourced and improve our environment. Author: Tom Buis CEO, Growth Energy (202)545-4000 tbuis@growthenergy.org

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Reaping the Benefits  of a Strong  Biofuels Industry

Ethanol producers are adding corn oil extraction to their technology arsenal in increasing numbers, providing an ideal opportunity for the ethanol and biodiesel industries to cooperate or even co-locate. On the cooperation side, the biodiesel producers, such as Renewable Energy Group, are already using corn oil produced at ethanol plants as a biodiesel feedstock. On the other hand, co-location of ethanol plants and biodiesel production hasn&rsquo;t yet gotten off the ground. While some wonder if it ever will, Mcgyan Biodiesel LLC is one company actively working to make it happen.
REG, the largest biodiesel producer in the U.S., currently operates one biodiesel plant that converts corn oil from nearby ethanol plants and has plans for retrofits at additional REG facilities. &ldquo;As our industry grows, we are going to need to develop additional capabilities to use new feedstocks, and corn oil is the one growth feedstock that we see out there,&rdquo; says Dave Elsenbast, vice president, supply chain.
REG isn&rsquo;t the only biodiesel producer to turn to corn oil. The company, which owns/operates more than 210 MMgy of biodiesel production, closely tracks corn oil numbers for both the biodiesel and ethanol industries. By internal REG estimates, about 10 percent of biodiesel produced in 2010 was from corn oil. Although corn oil is an increasingly popular feedstock, with biodiesel production numbers increasing upwards of 800 MMgy in 2011, that percentage is likely to drop. &ldquo;Certainly the amount of corn oil being separated and being sold into the biodiesel market is up in 2011 vs. &rsquo;10 but probably has not kept pace with the growth of the biodiesel industry in total production,&rdquo; he tells EPM.
On the other side of the equation, REG estimates that in 2010 about 35 percent of ethanol plants had corn oil extraction in place. By the end of 2011, Elsenbast estimates that number will rise to above 40 percent. &ldquo;There is going to be rapid expansion continuing on into 2012,&rdquo; he says. &ldquo;The inedible corn oil extraction technology offers great profit opportunities to the ethanol producers with very limited risk.&rdquo;
Notably, three top ethanol producers have installed back-end corn oil extraction technology at their dry mill plants. Green Plains Renewable Energy Inc. spent the past year retrofitting all nine of its ethanol plants and now produces about 120 million pounds of crude corn oil yearly. Valero Renewable Fuels Co. LLC, which operates 10 ethanol plants with a combined capacity of 1,110 MMgy, plans to add the technology to four of its plants by spring and has left the door open to corn oil at another five dry mill ethanol plants, saying it will &ldquo;study the possibility&rdquo; after instillation at the first four plants is complete. Poet LLC has developed Voila, a trademarked, low free fatty acid corn oil. The company installed the technology first at its Poet Biorefining plant in Hudson, S.D., and announced in early December that it had been installed in four more plants. In all, the Poet plants have the capacity to produce about 100 million pounds of corn oil yearly.
The two largest markets for crude corn oil from ethanol plants are feed and biodiesel production, says Joe Riley, general manager of FEC Solutions, which markets corn oil for three ethanol plants. Some corn oil also goes into industrial, oleochemical and export markets. &ldquo;We&rsquo;re always looking for new and higher value markets for the product,&rdquo; he adds.
While the market for corn oil is still shaking out, in general, it&rsquo;s a good feedstock for biodiesel producers because it&rsquo;s priced lower than soy oil. Ethanol producers want to sell into the biodiesel market because they can typically get better prices than for feed. &ldquo;Feed is kind of the bottom rung of the food chain, so to speak,&rdquo; he says. &ldquo;If you can&rsquo;t get rid of something, essentially, you will feed it to an animal. ... I think it&rsquo;s in the feed market right now because it hasn&rsquo;t found the higher value markets that it should be in.&rdquo;
Co-location Can-Do It&rsquo;s a concept that&rsquo;s been batted around for a long time: Could biodiesel plants co-locate with ethanol plants that extract corn oil and thereby have an onsite feedstock source? Mcgyan Biodiesel says it&rsquo;s on the verge of getting it done. The Anoka, Minn., company has a letter of intent to build 3 MMgy biodiesel plants next to two ethanol plants, utilizing corn oil produced onsite, says Steve Rupp, president. Construction is expected to begin in 2012. &ldquo;Conservatively speaking, they would start to come online at the beginning of 2013,&rdquo; he says, adding that although the modular system could be built in different sizes, 3 MMgy is ideal. &ldquo;That size works very well with a 100 MMgy ethanol facility because that&rsquo;s about the right amount of oil that they would get out of their DDGS,&rdquo; he says.
The Mcgyan Biodiesel Process has been operating successfully since November 2009 at the 3 MMgy Ever Cat Fuels LLC facility in Isanti, Minn. It&rsquo;s a stand-alone operation that converts corn oil shipped in from ethanol plants. In addition, the biodiesel plant utilizes waste oils, such as used cooking oil from area restaurants. But that&rsquo;s not all. &ldquo;We&rsquo;ve tested probably over 50 different types of oil in our laboratory and we haven&rsquo;t found any oils that we can&rsquo;t turn into biodiesel using our process,&rdquo; he says.
When working with an ethanol plant partner, Mcgyan licenses its biodiesel technology, which works with any of the existing back-end corn oil extraction technologies. The company then oversees installation of the modular system and trains the operators. In exchange, Mcgyan receives a royalty payment based on revenues, Rupp says. Although it depends on existing infrastructure, such as onsite holding tanks, a stand-alone Mcgyan upgrade to an ethanol plant would cost $7 to $8 million, he tells EPM. The project would have an estimated 18-month to two-year payback.
With investment in the Mcgyan system, ethanol producers can bring in higher profits for biodiesel than selling corn oil for feed, and add needed diversification. Producing biodiesel onsite at an ethanol plant could be particularly attractive to petroleum company owners, something that is becoming more common in the ethanol industry, Rupp says. Rather than purchasing renewable fuels or renewable identification numbers (RINs), these companies find it cheaper to produce their own renewable fuels.
The Mcgyan model will succeed because its biodiesel conversion process can handle the high content of free fatty acids contained in crude corn oil, he says, something the traditional biodiesel production process cannot do. &ldquo;That&rsquo;s really where we shine,&rdquo; he says. &ldquo;We have the ability, using our process, to handle any combination of free fatty acids and triglycerides. So you can take 100 percent food grade oil, you can take 100 percent waste product or rancid oil or you can take any combination of the two. It&rsquo;s very flexible in terms of the feedstocks that can be used.&rdquo;
Perhaps the biggest advantage, however, is that the ethanol plant would only need to hire a few additional employees to operate the biodiesel plant. The 3 MMgy Ever Cat Fuels plant, which runs 24/7, has a full staff of 12. A Mcgyan biodiesel plant integrates with the existing control system of the ethanol plant, requiring no new management positions and only about four operators and one laboratory technician. &ldquo;[That] is going to reduce their biodiesel production cost,&rdquo; he says.
Another possible synergy is that ethanol could be used in place of methanol for biodiesel production. With the current economic conditions, an ethanol producer can get much more out of selling its ethanol than producing biodiesel with the product, Rupp says. Still, the Mcgyan process does make it possible for the production of a &ldquo;fully green biodiesel,&rdquo; which could, in the future, command a premium in the marketplace. The company has also successfully produced biodiesel using butanol or propanol.
Finally, Rupp emphasizes that Mcgyan biodiesel plants wouldn&rsquo;t be in competition with currently idled plants, as those facilities utilize soybeans and traditional process technology. The system could technically process soy oil, yes, but it wouldn&rsquo;t make economic sense. &ldquo;It&rsquo;s not our mission to take food and turn it into biodiesel,&rdquo; he adds. &ldquo;We&rsquo;re just taking nonfood-grade materials, waste products, low-level material that in the past may have been just burned and used for Btu value, like heating value, or just put into a landfill. Those are the types of feedstocks that we like to use.&rdquo;
Not everyone looking at co-locating ethanol and biodiesel production has their eye on corn oil as a feedstock, however. One World Clean Energy Inc. wants to build integrated biorefineries that co-locate ethanol and biodiesel production as well as green natural gas and electrical power. The company is skipping over corn oil as a biodiesel feedstock, however, because it considers the single feedstock model a &ldquo;short-term solution at best,&rdquo; says William Bivens, CEO and founder.
The company plans to build plants in the U.S. and internationally based on a model that produces 10 MMgy ethanol, 10 MMgy biodiesel and 10 megawatts electricity, at an estimated capital cost of $100 million. It recently added two additional designs&mdash;a 1/1/1 and 5/5/5 for total capital costs of $10 million and $50 million. Feedstocks for ethanol would be any starch crop or starch waste and for biodiesel any animal fat, waste cooking oil or vegetable oil. Electricity or natural gas would be produced from any organic waste.&nbsp; In October, the company announced it had secured its first memorandum of understanding to construct and commission a $115 million integrated 10/10/10 biorefinery in South Africa.
Although co-locating biodiesel and ethanol plants hasn&rsquo;t come to fruition yet, FEC Solution&rsquo;s Riley believes it makes a lot of sense. He&rsquo;s thinking about the more than 100 diesel trucks that are at the plant daily, dropping off corn and picking up ethanol or distillers grains. What if an ethanol plant were to put in a pump and sell the biodiesel it produces to those drivers? What if that ethanol plant put in a convenience store and also sold its own ethanol? So far, the industry hasn&rsquo;t jumped on that idea. &ldquo;It would have to be a rather entrepreneurial plant until it has been proven by somebody,&rdquo; he says, adding that ethanol plants already get a good price for corn oil, so there isn&rsquo;t a lot of incentive to go to value-added propositions.
As more ethanol plants add corn oil extraction technology, however, the price will be driven down. It&rsquo;s called puking the market, Riley says, and it&rsquo;s already starting to happen. &ldquo;We&rsquo;re getting closer and closer to it, so we&rsquo;re starting to see substitute products&rsquo; value decrease,&rdquo; he says. &ldquo;They decrease for a lot of different reasons, but the pressure from corn oil is apparent in the feed market.&rdquo; Cooperation Model REG doesn&rsquo;t believe co-location of ethanol and biodiesel plants will happen&mdash;at least not with today&rsquo;s technology and economic conditions. First, there is more than 2 billion gallons of biodiesel capacity today with a market size of only 800 to 1 billion gallons. Due to that overcapacity, the company doesn&rsquo;t believe there will be any new large-scale greenfield biodiesel plants built anytime soon. &ldquo;Technology is constantly changing and improving, so this is a question that needs to be asked quite often,&rdquo; Elsenbast says.
Brad Albin, vice president of manufacturing for REG agrees. &ldquo;We don&rsquo;t think it&rsquo;s probably rational to put in a small 1.5 to 3 MMgy biodiesel production facility when there is 2 billion gallons of capacity out there that is sitting there waiting.&rdquo;
For now, REG believes the best model is what the company is already doing at its 60 MMgy Seneca, Ill., biodiesel plant&mdash;sourcing corn oil from nearby ethanol plants. Not only is REG Seneca strategically located to source corn oil, but it&rsquo;s two hours from Chicago where it can sell its biodiesel. For this, REG&rsquo;s first corn oil-to-biodiesel plant, the technology was in place when acquired. &ldquo;That&rsquo;s, in fact, one of the main reasons we purchased that plant,&rdquo; Albin says.
Another strike against the idea of co-location is the complexity of converting corn oil into biodiesel. &ldquo;It is difficult to process into biodiesel feedstock and we certainly, over our time in history, have gone through our learning curve to perfect the conversion of inedible corn oil into biodiesel,&rdquo; Elsenbast says.
Finally, there&rsquo;s the evolution of ASTM specifications for biodiesel to consider. Plants looking to co-locate risk having to upgrade their biodiesel plant to meet new specs.
For now, REG believes ethanol plants will continue to maximize revenues by selling corn oil, not converting it to biodiesel at co-located plants, Albin says. The market for renewable chemicals, which REG will be entering in the very near future, will likely attract the attention of more ethanol producers than biodiesel production.&nbsp; &ldquo;Today, I don&rsquo;t think that you are going to just build a plant next to an ethanol plant for the sole reason of running corn oil through it,&rdquo; he said. &ldquo;I think the risks are too high.&rdquo; Author: Holly Jessen Associate Editor, Ethanol Producer Magazine (701) 738-4946 hjessen@bbiinternational.com

William Bivens, CEO and founder of One World Clean Energy Inc., considers the single feedstock model a â€œshort-term solution at best.â€�

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Clayton McNeff holds up a bottle of biodiesel produced with waste cooking oil at the Mcgyan Biodiesel pilot plant. The Mcgyan process has been used to convert many oils including corn oil, to biodiesel.

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Corn oil is a growth area for biodiesel feedstocks, though it requires know-how to process it successfully, says Dave Elsenbast, REG vice president, supply chain.

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Corn oil forges a link between ethanol and biodiesel production

Golden Possibilities

A fourth ethanol plant now bears the Big River name. Big River Resources LLC closed the acquisition of the former Western Wisconsin Energy LLC plant Dec. 1. &ldquo;The plant continued operations as normal through the acquisition and continues to operate at full capacity as Big River Resources Boyceville LLC,&rdquo; Jim Leiting, general manager of Big River Resources tells EPM.
The 55 MMgy Boyceville, Wis., plant began producing ethanol in 2006. Big River Resources was formed as a cooperative but evolved into a joint venture holding company structured for multiple ethanol plants. The company operates ethanol plants in West Burlington, Iowa, and Galva, Ill., as well as being a majority shareholder and managing partner in a plant in Dyersville, Iowa. With the recent purchase, Big River Resources&rsquo; plants have a combined capacity of 380 MMgy. The company is also an investor in Absolute Energy LLC, a 100 MMgy ethanol plant in St. Ansgar, Iowa, and owns a development site in Grinnell, Iowa, as well as 10 million bushels of grain holding capacity in five locations in Illinois.&mdash;Holly Jessen

Big Growth

Some savvy ethanol producers saw the writing on the wall and began the process of certifying the sustainability of their product a couple of years ago, but others are only now coming to realize the importance of certification, if they want to remain a player in the booming ethanol export business.
In July 2011, the European Union belatedly approved the first seven voluntary sustainability schemes for biofuels as required by the Renewable Energy Directive. The directive, commonly referred to as RED, requires all 27 EU member states to increase the amount of renewable energy they use to 20 percent by 2020. Ten percent of the member states&rsquo; transportation fuel must be derived from sustainable biofuels by 2020. To qualify as sustainable, biofuels must be certified through one of the approved schemes to ensure that they are not derived from lands converted from rainforests or grasslands, that the entire production process is deemed sustainable and that the biofuels reduce greenhouse gas (GHG) emissions by 35 percent compared to petroleum. The directive came into effect in December 2010, but the European Commission did not approve the first set of schemes until seven months later. Sustainability schemes are approved by the EC, but they are operated by private companies and institutions. A total of 25 schemes were submitted for EC approval prior to the July announcement. The commission is continuing to assess the applications not yet approved, but as of late 2011, the seven originally recognized schemes continue to be the only methods of certifying sustainability on a 27-member state scale. Other national systems may be used, but are only valid in the member state where the system was created. For American ethanol producers seeking to supply a piece of the European demand, certification of their fuel has become a must-have if they want to be a competitive player in the market. Some U.S. companies have gone through the process and Robert Demianew, U.S. director for certifications for Control Union Inc., says it&rsquo;s not too late for those producers who are not yet certified. Demianew&rsquo;s company has seen steady interest from producers over the past year and he expects that to continue. &ldquo;We have ethanol plants coming onboard every month,&rdquo; he says. &ldquo;We actually now have biodiesel plants coming on. The opportunities are still there. The EU is a very big market, so the demand side is still very strong. Depending on the particular markets that you are in, or the particular products you&rsquo;re dealing with, if you are going to be selling to Europe, very likely you&rsquo;ll be running into demand for these types of certifications.&rdquo; The Process So what does it take to become certified? First and foremost, ethanol producers should evaluate the marketplace and identify a buyer for their product. Once they have determined their role in the EU market, they can go about the business of selecting a scheme. The International Sustainability and Carbon Certification is the most well-known of the approved schemes and has been the scheme of choice to date in North America. Other approved schemes, such as the Roundtable on Sustainable Biofuels, have only recently begun to implement their standards. Each scheme has its own unique qualities. Many were developed directly for the EU and most are feedstock or region-specific, so the producer should carefully select the scheme that best meets its needs.
Matthew Rudolph, regional manager, Americas, at the RSB, says producers should approach certification as not just being something they need, but rather something they can do that will prove their sustainability. &ldquo;The majority of producers are very efficient, but there are a few bad apples,&rdquo; he says. &ldquo;If biofuels are done the right way, one way they can demonstrate that they are on the same side as the environmentalists is by becoming certified.&rdquo; Rudolph says the certification process consists of four steps: the producer&rsquo;s self-evaluation, which includes self-risk assessment and self-evaluation against the scheme, the scheme&rsquo;s review of the producer&rsquo;s information, approval and issuance of a code to the producer, and the producer&rsquo;s selection of a certification body. After a certification body is contacted by the producer, it conducts an audit to determine the producer&rsquo;s sustainability and issues a certificate. Certification Hurdles&nbsp;&nbsp;&nbsp; As of late 2011, the Control Union had certified the sustainability of about 25 U.S. ethanol companies under the ISCC standard. The certification process is just that&mdash;a process&mdash;but Demianew says it doesn&rsquo;t have to be a painful one. In fact, it is very likely the ethanol plant will be halfway to certification before the actual process even begins.&nbsp; &ldquo;Most of the ethanol plants are probably 50 to 60 percent ready, but they need to make sure they have the GHGs calculated and that they have enough of a farm base ready to sign,&rdquo; he says.
Because the EU did not create a default GHG value for corn ethanol, some facilities may need to hire a consultant to determine their GHG calculations. Every step of the production process must be considered when determining the plant&rsquo;s GHG value, right down to the grams of carbon dioxide equivalent produced for every bushel of corn. Some plants employ personnel able to conduct these evaluations, but others will have to bring in consultants at an added expense.
Calculating GHG emissions takes time, but convincing farmers to sign self-declarations could prove to be the most difficult step for producers. To show a sustainable chain of production, ethanol plants must be able to prove that a percentage of their feedstock has been certified as sustainable. This step begins by convincing farmers to sign a self-declaration agreeing to commit to sustainable agriculture production. The self-declarations are not complicated, nor do they typically require any changes at the farm. They also do not cost the farmer anything or subject them to frequent checkups or potential fines. However, Demianew says ethanol plants have sometimes had a hard time explaining that to their feedstock providers, leaving the farmers skeptical and unaware of the importance of the document.
&ldquo;The challenge to the industry is to get this outreach to the farmers and let them know what it is they&rsquo;re participating in,&rdquo; he says. &ldquo;We have not seen that the farmers have to make any changes to their current practices. Farmers are generally good stewards of the land. The difference here is that they just have to demonstrate through documentation what they&rsquo;re doing. If they can do that, they can participate. But farmers can be somewhat reluctant to sign anything, which means the elevator or ethanol plants need to encourage, inform and educate the farmers about what the documentation is.&rdquo;
Some of the more creative efforts taken by ethanol plants to inform farmers about the sustainability process include town hall meetings, offering higher purchase prices for certified corn or incentives in the form of gift cards to farmers who participate. The number of farmers required to participate in the process will vary depending on the plant and selected scheme and, in some cases, the ethanol plants are farmer-owned and more likely to have success in signing up farmers to the program. Worth the Cost? Cost of certification could be the largest drawback for producers when considering taking on this task. Participation in the schemes is voluntary so it may be difficult to justify the expense, but Rudolph stresses the value of proven sustainability and says certification could also be attractive to financiers. And considering that the domestic market is at its blend wall, anything producers can do to expand their marketing abilities may be well worth the cost. Demianew says certification can be viewed by ethanol producers as an outlet to new markets and an assurance that they will be able to enter the European market if and when they decide to do so. They can go through this process and not sell one gallon into Europe,&rdquo; he says. &ldquo;They might sell it on the domestic market, but they want to be in the position so that when that opportunity opens up they can sell it.&rdquo;
&nbsp;
Approved Schemes &bull; International Sustainability and Carbon &nbsp;Certification&mdash;a global initiative including a large &nbsp;number of companies from the supply chain and non-governmental organizations including the World Wildlife Fund. &bull; Bonsucro EU&mdash; a roundtable initiative that serves &nbsp;as a standard for sugarcane-based ethanol with a &nbsp;focus on Brazilian sugarcane production. &bull; Roundtable for Responsible Soy EU RED&mdash;a &nbsp;version of the Roundtable for Responsible Soy &nbsp;scheme designed to meet the requirements &nbsp;of the Renewable Energy Directive. It serves as &nbsp;a standard for soy-based biodiesel with a focus on &nbsp;Argentinean and Brazilian soy production. &bull; Roundtable on Sustainable Biofuels EU RED&mdash;a &nbsp;roundtable initiative that covers all types of &nbsp;biofuels and has a global scope. &bull; 2BSvs&mdash;otherwise known as the Biomass &nbsp;Biofuels Sustainability voluntary scheme, the &nbsp;scheme is a French initiative that covers all types &nbsp;of biofuels and is global in scope. &bull; RBSA&mdash;developed by industry member Abengoa, &nbsp;the scheme covers ethanol and has a global &nbsp;scope. According to the EU Commission, it is &nbsp;characterized by a mandatory requirement &nbsp;to calculate actual GHG values as opposed to also &nbsp;allowing default values. &bull; Greenergy Brazilian bioethanol verification &nbsp;program&mdash;also an industry initiative, the standard &nbsp;was developed by UK-based fuel distributor and &nbsp;biodiesel producer Greenergy and is applied to &nbsp;Brazilian sugarcane ethanol.
&nbsp;
Author: Kris Bevill Associate Editor, Ethanol Producer Magazine (701) 540-6846 kbevill@bbiinternational.com

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Ethanol bound for the EU undergoes new scrutiny 


Certifying Sustainability

If there&rsquo;s one thing the experts can agree on it&rsquo;s that hedging is a complex topic. One simplified way to describe it is as a type of insurance. In a forward contract, an ethanol plant that has a contract for corn at a certain price will save money if, later on, the price of corn shoots up. On the other hand, the company takes the risk that the price of corn could also go down. &ldquo;Somewhere you need to be able to offset the risk of that movement,&rdquo; says Jim Leiting, general manager of Big River Resources LLC. &ldquo;Because if the value of your corn changes, for every 30-cent move in corn, you need a 10-cent move in ethanol to stay even.&rdquo;
One common hedging practice is for ethanol producers to also enter into a contract on the futures market, typically to sell corn at a specific price on a certain future date. An ethanol plant that has a forward contract with a farmer is obligated to purchase corn, say at $7 a bushel, even if corn prices fall to $6. To protect from a big financial loss, the company can enter into a futures contract at the same time, theoretically guaranteeing a certain price. By hedging one investment against another, the company reduces its potential loss. &ldquo;The whole principle is to limit your exposure to flat price movement in a commodity market that&rsquo;s very volatile,&rdquo; Leiting says.
Ethanol plants typically seek price protection for four main commodities&mdash;corn, natural gas, ethanol and distillers grains. Some plants also produce corn oil. Distillers grains and corn oil cannot be hedged directly. Although distillers grains is traded on the futures market, there&rsquo;s not enough volume for it to be an effective hedge, Leiting says. The products can, however, be hedged against the commodities they track in price movements, such as corn and soybean oil.
Today, managing the margins is vitally important, according to Leiting. In 2011, corn ranged from as low as $3.80 to more than $7. &ldquo;Our operating margins, generally in the ethanol plant, are about 20 cents a gallon,&rdquo; Leiting says, &ldquo;so you really can&rsquo;t have exposure to that flat price swing.&rdquo;
Part of managing the margin is locking in the price of corn as well as ethanol. &ldquo;They may be missing out on even bigger profits by doing that, because they are locking in these prices early,&rdquo; April King, assurance and advisory services supervisor for Christianson &amp; Associates PLLP, tells EPM. &ldquo;But most of the plants have learned, I think, that they are happier doing that and that&rsquo;s a safer route to go, rather than leaving themselves exposed to the fluctuations of the different commodities.&rdquo;
The ability to make forward sales of ethanol hasn&rsquo;t always been available to producers, points out Neal Kemmet, general manager of Ace Ethanol LLC, a 40 MMgy ethanol plant in Stanley, Wis. His company selected a Canadian firm, Elbow River Marketing, specifically because it allowed Ace to lock in ethanol prices. &ldquo;That certainly wasn&rsquo;t the case three years ago when we signed on with Elbow River&mdash;they were one of the three ethanol marketing firms that would, in fact, fix a price on a forward ethanol contract,&rdquo; he says.
Surprisingly, there are still some ethanol plants that do almost no hedging. &ldquo;I was just out at a plant last week that did almost no hedging,&rdquo; King said. &ldquo;However, because of their location, it is working for them&mdash;they are completely playing the spot.&rdquo;
A company that operates in the spot market is a market taker. It takes whatever the market gives them, good or bad, says Jason Sagebiel, director of renewable fuels for INTL FCStone, &ldquo;which can be very good&mdash;we&rsquo;re coming off good margins right now [in December]&mdash;or it can be very bad&mdash;we are going into bad margins as you go into Q1,&rdquo; he says. &ldquo;Everything has its pros and cons.&rdquo;
Some ethanol producers do both. At Ace Ethanol, a certain percentage of ethanol sales are left open to the spot market, Kemmet says. Those percentages change, depending on the time of year, taking into account that the first quarter is typically difficult from a spot market perspective, while the fourth quarter is good. &ldquo;Our profit targets and the amount we are willing to hedge is a lot different from quarter four than it is from quarter one,&rdquo; he says. &ldquo;We treat each quarter differently when it comes to how much margin we are going to lock and what our margin targets are.&rdquo; Hedging History To understand hedging strategies for the ethanol industry today, it is helpful to look back. Many of the founding members of the industry were farmers who hailed from cooperatives that dealt with buying and selling of only one type of product&mdash;corn and other grains. &ldquo;The strategies for managing price volatility were pretty straight forward back in the old days,&rdquo; King says, &ldquo;so there was limited or simplistic hedging that took place.&rdquo;
The industry has evolved significantly. &ldquo;We are learning a lot, not only about production and efficiency, but the management is getting a lot savvier on developing hedge strategies,&rdquo; she says.
Hedging strategies, of necessity, have also evolved as the market has. When Leiting began working in the ethanol industry in 2005, ethanol prices were correlated with unleaded gasoline prices, he says. Today, ethanol prices track more closely with corn prices. &ldquo;As we rolled through 2006 and 2007, we saw a decoupling of ethanol and unleaded gasoline, or what became RBOB pricing, meaning they each had a supply and demand curve, and what we saw is you might see gasoline rise and ethanol may not have risen with it,&rdquo; he says. &ldquo;But what came along with that is the cost of ethanol, and the cost of ethanol production began to be recognized by the buyers, and ethanol prices began to correlate more with corn.&rdquo;
Data from Christianson &amp; Associates&rsquo; Biofuels Benchmarking program, in which 63 ethanol plants participated in 2010, shows that the price relationship between corn and ethanol was negatively correlated in 2009, a correction year after the volatility of 2008. In 2010, however, corn and ethanol pricing was nearly perfectly correlated, meaning reduced volatility, lower risk and stabilized profits. That strong correlation between corn and ethanol prices continued in 2011, with benchmarking program data for the first three quarters showing an about 95 percent correlation.
Another change from 2005 to 2007 compared to today is narrower margins, Leiting says. Pre-2008 margins were wide enough that commodity price changes didn&rsquo;t hit ethanol plants nearly as hard as they do today. &ldquo;You may have had less or more, depending on what that market did, but with the margin being as wide as it was, you still had a profitable plant,&rdquo; Leiting says. Today&rsquo;s ethanol plants, however, are likely to be working with margins between 10 and 20 cents a gallon. &ldquo;In that environment, your ability to be profitable is very sensitive to the volatility in these four key commodities,&rdquo; he says.
A lesson from the past is the importance of availability of working capital. &ldquo;In 2008, when the corn market went clear to $8, working capital became so constrained that even large companies such as ADM, Cargill and Bunge reached the limits of what they could borrow against their positions to maintain their hedge,&rdquo; Leiting says. Of course, 2008 was the year of bankruptcies, including VeraSun Energy Corp., the second largest ethanol producer in the U.S. at the time. &ldquo;If you have positions on, and the market moves in a direction against you in the futures market, then you have to be able to fund those moves and keep your hedges in place,&rdquo; he says. &ldquo;So working capital and the availability of working capital is a huge issue.&rdquo; Accounting Puzzle Piece Something Christianson &amp; Associates has discovered is that because there are different accounting options for derivative (or financial) instruments and hedging, it can be difficult to compare the hedging data of one ethanol plant to another.&nbsp; Specifically, ethanol plants have the option to recognize certain instruments or not, which can be confusing or misleading to board members or investors. This can be a significant issue the industry as a whole should be aware of, King says.
The issue starts with a 1998 statement from the Financial Accounting Standards Board, outlining different accounting options, the first two of which are known as fair value hedges and cash flow hedges. Due to the work involved, and the fact that these accounting methods are very complicated, the majority of, if not all, ethanol producers do not use these accounting methods. &ldquo;Normally the benefits don&rsquo;t outweigh the costs,&rdquo; King says.
The third category, which King refers to as normal derivative accounting, requires that all derivative instruments are recorded on the balance sheet with any gains or losses in the fair value charged through earnings in the current period. When companies utilize forward contracts they have two options: recognize the forward contracts as derivative instruments or designate them as normal purchases and sales. With the second option, the end result is that these forward contracts become off-balance-sheet arrangements, for which the changes in fair value are not recognized in the financial statements. This simplified accounting method worked well for ethanol plants in the past, when an ethanol plant&rsquo;s hedging efforts primarily included forward contracts, King says. &ldquo;In effect, only half of the economic hedge is being recorded,&rdquo; she says. &ldquo;In annual financial statements, the effect is not as obvious since hedging gains and losses are combined with the related revenues or cost of sales, but interim statements generally disclose the accounts separately, often sparking concerns from investors, lenders and board members.&rdquo;
What&rsquo;s the solution? Ethanol plants that do not recognize forward contracts as derivative instruments on their financial statements may want to consider a change in their accounting methods. &ldquo;They do have the option to treat those in the exact same manner as they are treating their other positions, which would be to mark those to market as well, so that you are actually showing true results in your financial statements,&rdquo; King says. Author: Holly Jessen Associate Editor, Ethanol Producer Magazine (701) 738-4946 hjessen@bbiinternational.com

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The ethanol industry's understanding of hedging has evolved over the years, making it a vital puzzle piece in profitable operation

Pieces of the Puzzle

Mascoma Corp. received some early holiday presents that will help the company construct its commercial-scale hardwood cellulosic ethanol plant in Kinross, Mich. Two weeks before Christmas, it settled with Valero Energy Corp. for the oil refiner and ethanol producer to provide the majority of the funding for the $232 million project to construct, commission and start up the facility. Less than a week later, Mascoma announced up to $80 million in funding from the U.S. DOE, in addition to $20 million previously awarded.
Kinross Cellulosic Ethanol LLC is a joint venture of Frontier Renewable Resources LLC, a subsidiary of Mascoma, and Diamond Alternative Energy LLC, a subsidiary of Valero. Construction on the 20 MMgy cellulosic ethanol plant is expected to begin this spring and should be completed by late 2013.
Valero will hold a majority interest in the joint venture, provide project management during construction and operate the completed plant. The oil refiner will also market the ethanol and has the option to expand the facility to up to 80 MMgy. A minority interest holder, Mascoma developed the proprietary consolidated bioprocessing (CBP) technology over the past five years and will also receive royalties based on ethanol yield milestones for a certain time period. The two will partner on additional cellulosic ethanol facilities.
&nbsp;&ldquo;This partnership provides an exciting opportunity to combine Mascoma&rsquo;s innovative CBP technology platform and expertise with Valero&rsquo;s project management, operating, distribution and marketing capabilities,&rdquo; says George Stutzmann, Valero vice president of alternative energy. &ldquo;We view this first commercial-scale cellulosic ethanol facility in Kinross and our partnership with Mascoma as an important foundation for potential expansion beyond Kinross.&rdquo; &mdash;Holly Jessen

Financing Breakthrough

Sales of E85 throughout 2011 in several Midwestern states easily exceeded their previous year&rsquo;s totals, according to data from the American Lung Association and the Iowa Renewable Fuels Association. The increased demand can be attributed to growing consumer awareness of the fuel and consumers&rsquo; desire to burn cleaner, domestically produced fuel, the groups say.
In Iowa, the nation&rsquo;s top ethanol-producing state, E85 sales in 2011 had already topped the entire previous year by the end of September. Nearly 9.8 million gallons of E85 were sold between January and September, compared to a total of 9.3 million gallons in 2010. &ldquo;It&rsquo;s exciting to see Iowans increasing their commitment to mid-and high-level ethanol blends,&rdquo; IRFA Executive Director Monte Shaw says. &ldquo;E85 keeps money here at home and reduces our dependence on foreign oil. Ethanol blends from E15 to E85 are the future for Iowa and America.&rdquo;
Consumers north of Iowa&rsquo;s border are also consuming more E85. The American Lung Association says Minnesota E85 sales were up 26 percent for the first eight months of 2011 compared to the same time period in 2010. Between January and August, the state&rsquo;s retailers sold a whopping 14.2 million gallons of E85, compared to about 11.3 million gallons sold during the same months in 2010.
The state also made headway in increasing the amount of renewable fuels used in state vehicles. From January to September 2010, state agencies used about 724,800 gallons of E85. During the same months in 2011, that number was up by about 12,000 gallons. The Minnesota SmartFleet Committee says E85 now accounts for approximately 19 percent of its light-duty fuel purchases, which is an improvement toward meeting the state directive of reducing gasoline use in state vehicles by 50 percent from the 2005 baseline by 2015.
North Dakota has also notably increased its use of E85 in the past year. The state&rsquo;s retailers surpassed the 1 million gallon mark for the first time by the end of September, far exceeding the previous year&rsquo;s total E85 sales of about 660,000 gallons. In 2009, only about 275,000 gallons of E85 were sold in the state. The sudden skyrocketing of E85 sales in North Dakota is at least partially due to a program launched in late 2009 that provides financial incentives to retailers who install blender pumps in the state. To date, there are about 71 E85 fueling stations in North Dakota, according to the ALA.&nbsp; Minnesota is home to more E85 stations than any other state and has about 360 sites. Iowa has nearly 160 E85 locations, according to the IRFA.&mdash;Kris Bevill

ND E85 sales top 1 million gallons for first time; other states also show strong growth

E85 on the Rise

A quick glance at the &ldquo;Major Land Uses&rdquo; report released in December by the USDA&rsquo;s Economic Research Service, reveals some interesting statistics about total cropland area. The report, which was first released in 1945, is compiled about every five years, coinciding with the latest Census of Agriculture.
This year&rsquo;s report is based on 2007 land uses and puts cropland at 408 million acres&mdash;the lowest level since the first records were taken in 1945. That&rsquo;s 34 million acres, or 8 percent, below the previous low in 2002.
However, digging deeper into the report shows that the decline is partly due to a change in how the 2007 Census of Agriculture estimated cropland pasture, one part of total cropland. From 2002 to 2007 there was a 26 million acre decline in cropland pasture, offset by a 27 million acre increase in grassland pasture and range. In other words, the methodological change by the Census of Agriculture meant millions of acres of cropland pasture were reclassified from temporary to permanent pasture. &ldquo;Indeed, a comparison with National Resources Inventory data suggests that much of the change may be a result of the methodological change rather than an actual land use change due to farm operator or owner decisions,&rdquo; the report said. &ldquo;Because of the change in methodology, these two estimates are not strictly comparable with prior years.&rdquo;
What of ethanol&rsquo;s potential impact on land use change, which critics have so loudly decried? The report does briefly address this question, concluding that since the data is presented only though 2007, it doesn&rsquo;t address more recent developments. &ldquo;In recent years, higher corn prices, driven partly by increased demand for corn as an ethanol feedstock, have contributed to complex changes in the production of principal crops,&rdquo; the report said.
It also examines data from a survey of corn and soybean farmers published in &ldquo;The Ethanol Decade: An Expansion of U.S. Corn Production.&rdquo; This USDA report found that expansions in corn acreage from 2006 to 2008 were a result of soybean farmers shifting acreage to corn production. That shift from soy to corn was offset, however, by other shifts, primarily cotton into soybeans. &ldquo;Total acreage in harvested crops on corn and soybean farms expanded, with about a third of the increase due to shifts from hay and CRP land, as well as increases in double-cropping and a reduction in idle land,&rdquo; the land use report said.&mdash;Holly Jessen

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USDA releases latest accounting of U.S. land uses

Cropland Decline?

It&rsquo;s only been a few months since Abengoa Bioenergy broke ground on its 23 MMgy multifeedstock cellulosic ethanol plant in Hugoton, Kan., but so far, construction of its first commercial-scale cellulosic facility is still &ldquo;right on track,&rdquo; according to Executive Vice President Chris Standlee, and should be ready for commissioning by the end of 2013. &ldquo;We are very anxious to prove our technology at the commercial level and we are comfortable and confident that it&rsquo;s going to be as expected,&rdquo; he says. &ldquo;It will be efficient, effective and meet our expectations.&rdquo;
The company is also already exploring options for the location of its second commercial-scale cellulosic plant, but won&rsquo;t begin constructing that facility until 2014, after the Hugoton plant is operational. &ldquo;We&rsquo;re not looking to start construction on a new facility in the immediate future by any means, but it&rsquo;s never too early to be planning our next move,&rdquo; Standlee says.
Future Abengoa cellulosic plants will likely be co-located with its existing corn ethanol facilities, primarily because the necessary infrastructure already exists in those locations. &ldquo;We have the facilities, the roads, the offices, the relationships with the local producers and the states,&rdquo; Standlee says. &ldquo;So we&rsquo;re just simply building on what we already have. It&rsquo;s going to be much more efficient to do that.&rdquo; Abengoa&rsquo;s hub of ethanol production is in Nebraska, where the company operates an 88 MMgy plant in Ravenna and a 55 MMgy plant in York. Its cellulosic technology was also first proven at a pilot scale in York. Other Abengoa corn ethanol plants are located in Kansas, New Mexico, Illinois and Indiana. The two smallest of those plants, the 30 MMgy plant in Portales, N.M., and the 25 MMgy plant in Colwich, Kan., were temporarily shut down at the end of the year due to depressed market conditions.&nbsp;
Doug Bice, corporate project development manager at Abengoa Bioenergy, says that aside from logistical considerations, the availability of biomass and other natural resources, namely water, will be major factors in the selection of future cellulosic sites. &ldquo;Water is a critical component for functionality of the plant,&rdquo; he says. While the Hugoton plant is expected to use mostly corn stover and switchgrass as feedstocks, the company&rsquo;s technology is multi-feedstock capable and future plants will need to be located near an abundance of various energy crops and residues. &ldquo;It&rsquo;s difficult to build a facility and rely on dedicated energy crops because farmers are reluctant to plant those crops until a facility is constructed,&rdquo; Standlee says. &ldquo;For our next plant, we&rsquo;ll be looking at areas that have existing feedstocks available and the potential to develop more. Particularly, we think the dedicated feedstocks will have a great opportunity to provide the highest yields on a feedstock-per-acre basis.&rdquo;
Abengoa has received numerous federal financial awards over the past few years to support the Hugoton plant. In 2011 the USDA approved a Biomass Crop Assistance Program project to assist in establishing switchgrass acres near the plant. The company also received a $132.4 million loan guarantee from the U.S. DOE in late September. Standlee says government support has been instrumental in developing the Hugoton plant and BCAP has been especially important in establishing new feedstocks. &ldquo;One of the major challenges in the cellulosic industry is feedstock,&rdquo; he says. &ldquo;That&rsquo;s not just in the growth of the feedstock, but also the harvesting, the storage, the delivery. Any time you&rsquo;re dealing with a brand new use for a feedstock there are challenges to overcome. The BCAP program has the potential to ease the pain of developing cellulosic ethanol production.&rdquo;
Recent challenges to BCAP, federal loan guarantee programs and other federal incentives to support renewable energy industries make it difficult to predict whether financial assistance will be available to aid future Abengoa projects and Standlee says he&rsquo;s not sure whether the company will continue to pursue those projects with federal backing. &ldquo;We&rsquo;re still in the process of trying to build Hugoton and prove the economics at a commercial scale in that facility,&rdquo; he says. &ldquo;A lot of things can happen in two or three years. We&rsquo;ll see what happens.&rdquo; &mdash;Kris Bevill

As Abengoa Bioenergy continues construction on its first commercial-scale cellulosic ethanol plant in Kansas, the company is making plans for the second. The availability of water is a prime concern, as is the availability of exis

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Abengoa in early planning for second cellulosic plant

Next Up

1. Greenville, S.C.,-based Lincoln Energy Solutions recently hired three new managers to bring industry expertise to the growing biofuels solutions supplier. Larry Breeding joins Lincoln as a fuel specialist/product manager with experience in biodiesel production and engineering. Ralph Roberts has oversight for safety procedures, policies, customer reviews, staff management and fleet maintenance in the company&rsquo;s truck fleet. Tommy Rose is responsible for bulk ethanol and biodiesel sales, serves as renewable identification number coordinator and manages the hedge desk.&nbsp;&nbsp;&nbsp; 2. John Castle has been appointed president and CEO of Aventine Renewable Energy Holdings Inc., having served as the interim CEO since August. He joined the company as chief financial officer in April and on July 20 was promoted to executive vice president and chief operating officer. The company also appointed Calvin Stewart as chief financial officer, having served as interim CFO since August. 3. ZeaChem Inc. added Nancy Buese as the third independent member and audit chair on its board of directors. She brings 20 years of financial leadership to the board and currently serves as senior vice president and chief financial officer of Denver-based MarkWest Energy Partners LP. 4. Chase Lane has joined the technical optimization team at Ferm Solutions Inc. He will serve in the Southwest, including Texas, southwest Kansas, Colorado and New Mexico. He joins the ethanol industry service provider with several years experience at the former Hockley County Ethanol plant in Levelland, Texas. 5. John Harangody has been promoted to chief operating officer of Houston-based Atlas Commodity Markets. He most recently held the same position with Atlas Grain in Chicago and previously served as director of commodity products for CME Group. &ldquo;Coming changes in the regulatory environment for OTC derivatives present challenges, but also significant opportunities,&rdquo; Harangody said. &ldquo;Atlas is in a strong position to assist our customers to successfully adapt to new market structures.&rdquo; 6. Marquis Management Services Inc. has tapped Beth Steinhour to become its director of environmental affairs. With her 21 years of experience, Jason Marquis, company president, said Steinhour&nbsp; will bring a new level of expertise to the regulatory and environmental compliance issues that biorefineries face. &ldquo;We believe with our plan for continued growth in the biorefining industry, Beth is a strategic addition to the Marquis Management team,&rdquo; he said.
7. Mark Beemer is the new president of R3Fusion Inc.&rsquo;s ethanol division, responsible for the development and deployment of the ethanol water separation business for North America. He will oversee the manufacturing partnerships, installation arrangements and operation startup of R3Fusions&rsquo; patented SPaCeR, water separation and purification technology. Most recently Beemer served as chief commercial officer for Osage Bio Products and as a board member at Hawkeye Renewables LLC.&nbsp; &nbsp;&nbsp;&nbsp; 8. Speedling Inc., specialists in feedstock propagation, named four to its biomass feedstock advisory committee. Iowa State University assistant professor of agronomy Emily Heaton focuses on best management practices for perennial energy crops, with particular emphasis on miscanthus and switchgrass. Tom Voigt, associate professor and extension specialist in crop sciences at the University of Illinois-Urbana-Champaign, leads the Energy Biosciences Institute feedstock program and North Central Sun Grant feedstock partnership in miscanthus. Lynn Sollenberger, professor of grassland science, University of Florida, specializes in the ecology and management of tall grasses for bioenergy applications. John Caveny, president of Environmentally Correct Concepts Inc., partnered with the University of Illinois in planting an on-farm miscanthus research plot in 2002, now the oldest research plot in the U.S. Speedling propagates and sells plugs of the sterile Illinois clone of miscanthus from Caveny Farm.&nbsp; 9. Poet LLC is more than 75 percent of the way to achieving its water reduction goal set in its environmental initiative dubbed &ldquo;Ingreenuity.&rdquo; With startup of the proprietary Total Water Recovery system at its 18th ethanol production facility, Poet Biorefining &ndash; Chancellor (S.D.), the company has now reduced water use by more than 770 million gallons per year from 2009 use. The goal is to reduce water use by 1 billion gallons annually by 2015. Chancellor&rsquo;s Total Water Recovery System saves the plant 131 million gallons of water per year. That savings means Chancellor uses 2.6 gallons of water for each gallon of ethanol produced, down from 3.5. 10. Interstates Companies has earned the Safety Training and Evaluation Process Diamond status, the highest safety designation awarded by Associated Builders and Contractors Inc., for its safety performance. It is the only company to achieve this designation in each of the four chapters it belongs to, Iowa, Rocky Mountain, Cornhusker and Arizona.&nbsp; Headquartered in Sioux Center, Iowa, Interstates Companies specializes in turnkey electrical systems for industrial, hazardous and value-added agriculture facilities, including ethanol plants. 11. In 2012, Lee Enterprises Consulting Inc. of Little Rock, Ark., intends to expand its services now concentrated on the biodiesel sector into the ethanol, biomass, wind, solar and geothermal sectors. &ldquo;We are currently the world&rsquo;s largest biodiesel consulting group, and most of our consultants and strategic partners are already very involved in the other alternative fuels,&rdquo; said Wayne Lee, principal owner. The group&rsquo;s current appraiser, environmental expert, QA experts and grant writers have backgrounds and experience in these areas, and each of the group&rsquo;s larger strategic partners&mdash;Stoel Rives (legal), Christianson &amp; Associates (accounting), IMA of Kansas (insurance), FCStone Merchant Services (feedstock financing), and Executive Leadership Solutions (staffing) &mdash;already has a very significant presence in these other alternative fuels sectors.

Tech Support   
Chase Lane brings several years experience working at a Texas ethanol plant to his new position with Ferm Solutions.

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Trucking Manager
Ralph Roberts joins Lincoln Energy as general manager, transportation, overseeing all operation aspects related to the trucking fleet.

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Biofuels Trader
Tommy Rose brings a background as an ethanol trader to Lincoln Energy.

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Consultant to Director  
As senior consultant with Weaver Boos Consulting, Beth Steinhour advised ethanol, agrichemical and biomass facilities across Illinois and the Midwest on development, permitting and compliance.

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Business Briefs

Working with a firm that provides services to numerous ethanol plants provides an interesting outside/in perspective that has provided an opportunity to witness a present-day evolution.&nbsp;&nbsp;
Many ethanol plants were the result of a vision held by a group of investors, a design/build plan that included a license to a specified process, and a lot of hard work. But it wasn&rsquo;t long until the operators of these plants began to add components to the design/build and to tweak conditions of the licensed process to produce ethanol better, faster, cheaper.
The evolution includes equipment and processes developed for production of value-added byproducts to extend the ethanol profit. During the past few years, the role of the process and equipment providers began to change, as well. Now, design/build providers design and build in cooperation with the ethanol company, rather than provide a turnkey, nearly take-it-or-leave it project.&nbsp; But this evolution is not without rough patches.
Now, the operators of the plants make adjustments, add components and tweak conditions of the processes provided for turnkey plants. A few of these improvements rise to the level of invention. And that raises an interesting question: Who owns the innovations made by those using the processes or equipment, when the original process or equipment was provided by another?
One would think that an entity supporting and/or funding the innovation (the ethanol plant) would be the hands-down rightful owner, right? But the combination of inventor&rsquo;s rights under United States patent law and the fine print in some of the provider contracts may obliterate that assumption.
Inventors in the United States are the owners of their inventions unless a) there is a contract in place stating otherwise or, b) the inventor is an employee who invented something that is within the scope of his employment, in which case the employer owns the invention. For comfort and certainty related to scope of employment, it is advisable to include invention assignment obligations in all employment contracts.
Many of the provider contracts include an assignment provision that requires assignment to the provider of any improvements made by the plant to the process or equipment. You may want to read that sentence again. Technically, that means the provider owns the improvement and could exclude the very plant that developed the innovation from using it. You may want to dig out that agreement before you invest in improvements. If such a clause exists, the provider should be willing to pay for some of the development costs. More importantly, the process provider should agree to a royalty-free and perpetual license back to the plant. Many provider contracts have addressed this issue by including just such a license. The provider retains commercial benefit of the plant&rsquo;s improvement; the plant retains a right to use.
What&rsquo;s both wonderful and terrible about innovation, though, is that it is often the result of collaboration, with two entities working toward, and finding, a solution to a problem. Without contractual obligations to the contrary, under United States patent law an invention resulting from such collaboration will be deemed jointly invented. This means either joint inventor may sell or license its interest to any other party it wishes and could result in no competitive advantage. Even if both parties wish to out-license the invention, there will quickly be a race to the bottom for royalty rates. What&rsquo;s the remedy for this unfortunate situation? Careful drafting of an agreement BEFORE the collaboration begins is crucial to a happy ending. The terms should cover the uses allowed for each party and structure accounting as necessary. Further, the agreement must address later improvements made by only one of the parties.
It is important to remember that inventions and innovations are the logical and beneficial result of evolution. If you wish to enjoy the benefits of your own evolution in the ethanol production world, however, checking current agreement terms or drafting addendums may be a necessary evil.

The Ethanol IP Evolution

&nbsp; Over the past 25 years, the American Coalition for Ethanol has recognized the need to be nimble and adapt tactics in pursuit of our mission to make American ethanol the consumer fuel of choice.
In 1987, our initial emphasis was to educate legislators in a few core states and sponsor ethanol-fueled dirt track races to familiarize mechanics and gas station owners with ethanol&rsquo;s high-octane performance. Those efforts soon expanded to provide desperately needed policy leadership at the federal level and to educate petroleum marketers nationwide about the benefits and blending economics of ethanol. Indeed, ACE took the initiative to be the first group to support enactment of a renewable fuels standard (RFS) in Congress and to sponsor studies on midlevel ethanol blends such as E30 which led to blender pump promotion.
In 2012, much of our focus will pivot to states to help ensure the remaining hurdles to E15 use are cleared. This will involve working with other groups to change laws and regulations at the state level and proactively promoting the benefits of E15 for consumers and petroleum marketers. We can and will apply the lessons we learned from the expansion of E10 use in the states to help make the transition to E15.
Congressional gridlock prevented the enactment of ethanol legislation last year, but that doesn&rsquo;t mean federal energy policy stood still. To the contrary, President Obama rode herd over two landmark energy policy changes in 2011, rules controlling emissions from coal-fired power plants and proposed aggressive new fuel economy standards (corporate average fuel economy, or CAFE rules) for automobiles.
Given the ongoing partisan bickering and legislative logjam in Congress, which will likely worsen in this presidential election year, ACE will play an active role in the CAFE and other key federal rulemakings in 2012.
The new CAFE standards apply to light-duty vehicles beginning in model year 2017, requiring a nationwide average of 54.5 miles per gallon by model year 2025. While the automakers agreed to this overall fuel savings goal in negotiations with the Obama administration, it will nevertheless be very challenging for them to meet. In fact, unless refiners are compelled to clean up their fuel in tandem with new CAFE rules, automakers, at no fault of their own, will be unable to meet the new fuel economy standards and keep the air we breathe clean and safe. The reason is aromatics, which are classified as hazardous air pollutants.
This is where ethanol enters the picture, as the cleanest and most affordable form of octane on the planet. A coalition of public health and consumer groups that care about the environment and ACE will make the case in rulemakings this year that if ethanol&rsquo;s clean octane is allowed to replace the toxic, expensive, and energy-inefficient aromatics (benzene, toluene, xylene) that refiners use to add octane to fuel, the resulting benefits will be substantial&mdash;reduced oil use, cleaner and safer air, and more demand for American-made ethanol.&nbsp;
Replacing benzene, toluene and xylene in transportation fuel with ethanol&rsquo;s clean octane would be analogous to getting the lead out of gasoline and would set up the predicate for how we can someday fulfill a goal many in the industry have for widespread use of E30 or similar midlevel blends.
That is not to say we&rsquo;re ignoring Capitol Hill. Indeed, as we&rsquo;ve indicated numerous times already, ACE and other groups will work together to protect the RFS in 2012 and address other legislative priorities.
In that spirit, I&rsquo;ll close this month by encouraging everyone to participate in ACE&rsquo;s upcoming grassroots fly-in to Washington, D.C., scheduled for March 27-28. I hope to see you in D.C. next month. Author: Brian Jennings Executive Vice President, American Coalition for Ethanol (605) 334-3381 bjennings@ethanol.org

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Ethanol's Octane Provides Proactive Opportunity

Many of us are growing tired of hearing about the Manomet study and are more than familiar with the assumptions that guide its debt-then-dividend forest biomass carbon emissions findings. They&rsquo;ve been outlined and pored over in numerous credible studies, and are well-documented in our industry. But one more report deserves notice.
 While not intended to refute the Manomet study, this report, &ldquo;Managing Forests Because Carbon Matters: Integrating Energy, Products, and Land Management Policy&rdquo; does address the Manomet findings directly. The new research confirms that forest biomass used for heat and power generation does not, in fact, release any net carbon. Undoubtedly one of the most exciting aspects of this study is its authors: forest scientists from multiple universities and organizations, including the U.S. Forest Service, a federal agency tasked with understanding and caring for our nation&rsquo;s forestlands.
 The Manomet study was done in 2009 by researchers from the Manomet Center for Conservation Sciences. It was commissioned by the Commonwealth of Massachusetts to evaluate the carbon neutrality of biomass for energy. The state had also implemented a moratorium on renewable portfolio standard qualification for biomass projects, to remain in effect until the research was complete and any appropriate subsequent measures were taken. Manomet concluded that forest biomass initially releases more carbon dioxide than coal per unit of energy, but pays off its carbon debt as forests regrow and that carbon is resequestered.
 Based on the less-than-favorable study findings, the Massachusetts Executive Office of Energy and Environmental Affairs ordered a swift change to the RPS qualification standards. The resulting Sept. 2010 draft of standard revisions severely hinders biomass power development through stipulations that are difficult to achieve. The final regulations still have not been released and are now more than six months overdue. The legislative limbo has caused a monumental setback in Massachusetts&rsquo; biomass power industry.
 And Massachusetts developers aren't the only ones waiting on legislation. The U.S. EPA has commissioned its own study to determine the characteristics of biogenic emissions, deferring for three years implementation of its Greenhouse Gas Tailoring Rule for biogenic emissions, while the research is carried out. The EPA has also reluctantly rushed through the Maximum Achievable Control Technology Rules, and legislation currently in Congress would give it more time to completely overhaul them.&nbsp;
 It seems to me that in this time of regulatory uncertainty, a study by top forest experts should carry some weight.
 Associate Editor Anna Austin explores the study for a feature article this month, starting on page 30. She talks to a couple of its authors about how they anticipate the findings might be applied. Associate Editor Luke Geiver also has pleasant news to report, in the continued success of a Canadian biomass district heating plant. See page 24.
 All in all, this month&rsquo;s issue is packed full of good news about successful applications and about what we know to be truth regarding emissions.

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Good News for Forest Biomass

The saga of the U.S. EPA&rsquo;s Boiler Maximum Achievable Control Technology and related rules continues. With the District Court&rsquo;s decision on Jan. 9, invalidating the EPA&rsquo;s previous stay of the original rules, the need for Congressional action has now become critically important.
 Some background: In March 2011, the U.S. EPA issued final rules for, among other things, Boiler MACT and Commercial and Industrial Solid Waste Incinerators. These rules were flawed in many respects and, by EPA&rsquo;s own admission, were in need of further work based on lack of data and feasibility, among other reasons. As a result of the flaws in the March rules, on May 18, the EPA announced that it was delaying the date the rules would go into effect until the agency completed its reconsideration (76 Federal Register 28662).
 In accordance with the May 18 decision, the EPA issued revised Boiler MACT and CISWI rules based on the agency&rsquo;s findings after studying the potential effects of its original rules. The revised rules officially appeared in the Federal Register on Dec. 23, and the EPA has given the industry until Feb. 21 to respond. Presumably, the plan was for the new set of rules to be finalized this spring.
 However, this plan was disrupted on Jan. 9, when the U.S. District Court threw a wrench into the revised rules by essentially deciding that the May reconsideration was unlawful. The Court ruled that the EPA&rsquo;s original March 2011 rules already went into effect on May 20.
 While it would appear that the ruling does not affect the Non-Hazardous Secondary Materials rule that was also published on March 21, there are many unanswered questions. Which compliance dates apply, the March 2011 rules or the recently promulgated rules? Will litigants seek to invalidate the recent rules now that the court has determined that the EPA did not have the authority to stay them in March 2011?&nbsp; Most important, what does all this mean for the biomass industry caught in the crossfire? How many hard-earned dollars and jobs could be lost as a result of the confusion?
 All of this highlights a fundamental point: EPA rulemaking should not be done in the courts. For Congressional &ldquo;fence sitters&rdquo; who were reluctant to support legislation on the assumption that the EPA would &ldquo;get it right&rdquo; through the revised rules, the issue is now clear. Only legislation can cure the uncertainty that has been created by litigation. Congress needs to take action now to give the EPA the time it needs to collect and confirm all the facts, and craft rules that are reasonable, achievable, and protective of the public health and the environment. Author: Bob Cleaves President and CEO, Biomass Power Association <a href="http://www.USABiomass.org">www.USABiomass.org</a>

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Biomass Confusion at the EPA

On Washington D.C.&rsquo;s mild winter days, I often look out my office window to the bare streets below and reflect on the challenges of growing biomass thermal businesses amid a sharply divided and seemingly distracted government.&nbsp; In those moments, I recall a dinner conversation with a small town central-Michigan insurance agent.&nbsp;
 After passing the potatoes around the table and offering my Biomass Thermal Energy Council &lsquo;elevator&rsquo; speech, the insurance agent nodded in acknowledgement. &ldquo;I have a number of policy holders heating their homes with corn cobs and pellets,&rdquo; he shared. &ldquo;And they say they&rsquo;re saving significantly on their energy bills.&rdquo; If it weren&rsquo;t for my Midwestern manners, I would have high-fived the man on the spot, across the table settings and all.
 You see, despite troubling federal budget cuts, tax extenders and regulatory uncertainty, and ongoing congressional biomass education, I channel my inner Horace Greely and recognize the work of countless advocates and end users across the states. &ldquo;Go west, young man, go west and grow the [biomass thermal] country.&rdquo; Or more accurately, look north, south, and west of D.C. for signs of encouragement.&nbsp;
 From advocates in New England, to an enterprising collaborative organization in the Midwest, and on to growing forest stewardship and restoration works in the West, biomass heating and cooling is securing confidence on the backs of proven projects matched by regional understanding and impassioned supporters.&nbsp; When BTEC hosted a three-part regional webinar series as part of our U.S. Forest Service Wood Education and Resource Center grant, we easily recruited ardent speakers, saw inquisitive attendees, and received approval ratings exceeding other similar events. State governmental officials, consumers, and project developers, in near consensus, appreciated the regional nuances of biomass thermal resource use spoken in their shared accent.&nbsp;
 The spring of 2012 holds even greater regional recognition of biomass thermal progress, independent of the apparent Congressional stalemate. The fourth annual Northeast Biomass Heating Expo March 21-23 in Saratoga Springs, N.Y., will feature historical keynotes from the New York State Energy Development Authority. The U.S. Endowment for Forests and Communities will anchor the expo&rsquo;s content and outline the region&rsquo;s path to greater renewable heating use.
 Nearly 45 days later, an inaugural event, Heating the Midwest Conference and Expo: Forming the Vision, will transform the city of Eau Claire, Wis., into a biomass thermal brain trust April 25-27. An industry tour and conference program addressing biomass resource availability, processing, heating policy, combustion technologies, and success stories will inform the Midwest&rsquo;s biomass vision. When combined with the sustained western efforts of groups like the Rural Voices for Conservation Coalition, it&rsquo;s difficult to deny biomass heating&rsquo;s engagement coast to coast.
 Regional advances in biomass thermal generation are certainly unique to the communities, households, and businesses they serve. Yet, the identities they forge have dedicated roles in advancing shared federal policy.&nbsp; In recognition of these efforts, BTEC will support a series of regional member networks beginning in February, designed to link stakeholders, identify industry barriers, and disseminate successful state strategies. BTEC&rsquo;s Eastern, Central, and Western interests will bring louder and better coordinated voices to Washington than ever before. If supporting the biomass trade associations is not within your company&rsquo;s means, consider attending the Northeast Biomass Heating Expo or Heating the Midwest events, or joining a volunteer advocacy group like the Northeast Biomass Thermal Working Group.&nbsp;
 A pause in D.C. is an opportunity to reflect and organize from the bottom up, because history teaches that this Washington stalemate will not last. When the openings arise, BTEC will again be at the table, ready to speak for all biomass thermal supporters, regardless of pronunciation, twang, or drawl. Author: Joseph Seymour Executive Director Biomass Thermal Energy Council

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Speaking for Heat, Accent and All

Minnesota&rsquo;s forestry operations produce 300,000 tons per year of wood waste that is not used in any existing or proposed facility. Through the process of indirect liquefaction, this waste can be converted into liquid fuels that could be transported to remote off-grid sites and reformed to hydrogen to power fuel cells producing electricity.
 Using distributed power generation at off-grid sites eliminates the need to build transmission lines at remote sites, which ultimately saves utility ratepayers money. In addition, the wood-to-fuel technology provides a non-fossil fuel, nearly carbon dioxide neutral method to fuel backup generators. Even in areas that are served by the grid, this saves utility ratepayers the cost of maintaining large backup power production systems. Ratepayers may also be able to take advantage of future carbon credits or avoid carbon taxes applied to fossil energy-based power production.
 The Energy &amp; Environmental Research Center has developed and tested at small scales much of the technology necessary for distributed indirect liquefaction systems. With funding provided by customers of Xcel Energy through a grant from the Renewable Development Fund, and the U.S. Department of Energy through the EERC Centers for Renewable Energy and Biomass Utilization, the EERC designed and built a mobile, demonstration-sized indirect wood waste liquefaction system. The EERC then operated it in order to determine best construction and operating practices, overall system productivity, and necessary design changes to make the concept more commercially viable. The system was described in this column in the April 2011 issue.
 The system uses a unique gasifier to convert the wood waste into synthesis gas, which is cleaned and compressed and flows to a reactor that converts the gas to a liquid. In this program, we focused on the production of methanol, the simplest alcohol, because it can be easily reformed into hydrogen, which can be used to power fuel cells to efficiently make electricity at sites separate from the biomass resource. The gasifier was designed by the EERC to handle wet wood waste with up to 40 percent moisture, thereby eliminating the need to dry the wood before gasification, as most commercial gasification units require.
 Two types of wood waste were tested in the system: chipped hybrid poplar and chipped ash. In both cases, the hydrogen content of the gas produced was lower than expected. The methanol production rate was approximately 15 gallons per ton of biomass for both wood types. This initial production rate was relatively low but did serve to validate computer models of the system performance. Using those models, engineers have evaluated several improvements to the system to increase the hydrogen content of the syngas, which should allow production rates as high as 50 gallons per ton with the existing design and as much as 100 gallons per ton with additional hardware.
 Demonstrating this technology and using it to validate our engineering models has been an important step toward making use of neglected biomass residues to ultimately provide renewable distributed power generation. But an essential question must be answered: at what cost? The economics of the production of methanol by this technology will be discussed in a future Energy Review column. Author: John P. Hurley Senior Research Advisor, EERC (701) 777-5159 <a href="mailto:jhurley@undeerc.org">jhurley@undeerc.org</a>

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Update on a Mobile Indirect Biomass Liquefaction System

The emission standards for industrial, commercial and institutional boilers are back on the front burner at the U.S. EPA. In May, the agency suspended the standards it had promulgated just two months before, over concerns that compliance might be too costly or even unachievable. Now the EPA has published proposed revisions to the hazardous air pollutant emission standards for certain boilers and incinerators, including biomass-fueled boilers. The EPA projects the proposed changes, published Dec. 23, will cut the cost of implementation nearly in half from the original proposed rule, while still meeting the requirements of the Clean Air Act.
 Several new subcategories of units are proposed that may allow for more precisely tailored and, for some pollutants, less stringent emission limits for certain biomass units. The first is for boilers designed to combust kiln-dried wood, with new emission limits for particulate matter (PM) and carbon monoxide (CO) proposed for this subcategory. Second, separate numeric emission limits are proposed for PM and CO for the hybrid suspension/grate boiler subcategory (previously not assigned separate limits as a combustion-based fuel subcategory). Third, dutch ovens and suspension burners are proposed as two separate categories, based on their inherently different design, with each having separate emission limits for PM and CO. The EPA requests comment on whether further subcategorization of biomass units is appropriate.
 The EPA also proposes revision of certain emission standards in light of new data. Most importantly, a review of test data EPA had relied upon for dioxin/furans for all subcategories led the agency to determine that the test emissions were too low to be measured accurately. It now proposes a work practice standard for dioxin/furan emissions, requiring an annual tune-up in lieu of numeric emission limits.
 Also under the most recent proposed revisions, the PM continuous emission monitoring system (CEMS) requirement would be eliminated for biomass units. The EPA expressed doubts that this technology will have the ability to accommodate the unpredictable variety of biomass fuel constituents and moisture content, noting that it has not been sufficiently demonstrated in practice and relies on a single calibration point to measure emissions from a specific fuel type. The agency noted it would be impractical to replicate, during performance testing, all of the varying fuel conditions necessary for calibrating the monitor. Since PM CEMS cannot be applied with the accuracy necessary for compliance assessment, the EPA proposes continuous monitoring of operating parameters to determine compliance, which will substantially reduce monitoring costs.
 The proposal also clarifies the accompanying Non-Hazardous Secondary Materials rule, which sets guidelines for determining which materials are &ldquo;solid waste,&rdquo; and therefore subject to the more stringent emission limits of the Commercial and Industrial Solid Waste Incineration rule. EPA clarifies that certain biomass materials are considered traditional nonwaste fuel under the NHSM rule, and therefore not subject to the CISWI rule. Further, the proposal lists specific biomass materials to be included within the definition of &ldquo;clean cellulosic biomass,&rdquo; thus allowing them to be treated as traditional fuel. Additionally, the proposal lists several NHSMs as nonwaste when burned as a fuel in a combustion unit for which EPA has sufficient information to determine that discard is not occurring. This includes certain NHSMs which, though not meeting the criteria for &ldquo;legitimate&rdquo; fuel in all instances, would be considered a nonwaste fuel after balancing the legitimacy criteria with other relevant factors. Resinated wood, for example, would be deemed &ldquo;not a solid waste material when used as a fuel regardless of whether it remained within the control of the generator.&rdquo;
 The EPA promulgated the March regulations under a court-imposed deadline, and when the agency suspended the regulations to consider revisions, another suit was brought to vacate that &ldquo;stay.&rdquo; On Jan. 9, the D.C. District Court vacated the stay. Assuming the EPA holds to its announced schedule to promulgate final revisions by April, it is now uncertain whether existing sources will be required to comply with these new rules by 2014 according to the reinstated regulations, or by 2015 according to the proposed revisions. Further litigation may ensue, even as the EPA proceeds to finalize the revisions and implement the rules. How such litigation will affect the rules&rsquo; implementation remains to be seen.
 The EPA must receive public comments on the proposed revisions by Feb. 21. Authors: Glenn Unterberger Partner, Ballard Spahr LLP (215) 864-8210 <a href="mailto:unterberger@ballardspahr.com">unterberger@ballardspahr.com</a> Michael Duffy Associate, Ballard Spahr LLP (215) 864-8248 <a href="mailto:duffym@ballardspahr.com">duffym@ballardspahr.com</a>

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Understanding Further Revised US EPA Boiler Standards

ReEnergy appoints White director of energy operations ReEnergy Holdings LLC, a Latham, N.Y.-based renewable energy company, has named James White as its director of energy operations. White, who has a degree in marine engineering from Massachusetts Maritime Academy and an MBA in management from Bentley University, is responsible for ReEnergy&rsquo;s health and safety program and operation of the company&rsquo;s energy assets. He joined ReEnergy after five years in leadership roles with NextEra Energy Resources. White was plant manager for American Ref-Fuel Co. in Newark, N.J., for 10 years before joining NextEra.
 NAES announces new members of turbine services division Independent services provider NAES has incorporated new management, sales, proposal and support personnel with a wide variety of backgrounds and experiences into its Turbine Services Division. Russell James, Rob Broglio and Rick Stanford have joined the division as project services manager and business development managers, respectively, and Debi Patrick will be the new proposal manager. James brings nearly 30 years of field service experience in turbine overhaul and installation to the turbine field services management team. Broglio has more than 20 years of experience in new installations, as well as retrofit of power generation facilities, in both field and design engineering, in addition to business development and EPC project negotiations. Sanford&rsquo;s 25 years of experience in the oil, gas and power industries, with emphasis on rotating equipment and upstream markets, brings broad managerial experience to NAES rotating equipment and repair services. Patrick comes to NAES with 25 years of power industry experience with an emphasis on maintenance and construction projects.&nbsp; Potter promoted to engineering manager Aaron Potter has been promoted to engineering manager for Innovative Processing Solutions. Potter has more than 14 years of experience as a systems and design engineer for Innovative Processing, as well as its affiliate, Stedman Machine Co. Potter has a degree in mechanical engineering from Purdue University. His responsibilities include customer relations, project management, systems and component design, and estimating. ArborGen named Southeast Partnership for IBSS member ArborGen has been named as a core member of the recently formed Southeast Partnership for Integrated Biomass Supply Systems. Created through a $15 million grant from the USDA&rsquo;s National Institute of Food and Agriculture to accelerate the supply of biobased renewable energy, the IBSS partnership will develop sustainable feedstock production systems for dedicated energy crops, specifically purpose grown trees and switchgrass. The Center for Renewable Carbon, a program of the University of Tennessee Institute of Agriculture, will act as the lead institution for the IBSS, which will include several collaborating institutions throughout the Southeast. Maud Hinchee, ArborGen&rsquo;s chief science officer, and Michael Cunningham, director of product development, will serve as ArborGen&rsquo;s representatives to the Southeast IBBS partnership. ArborGen expertise will be critical in meeting the IBSS partnership goal of exploring the inherent performance and cost advantages of short-rotation woody crops such as eucalyptus, pine and poplar, matching the economic and environmental performance of each feedstock with a preferred conversion platform. Pellet Technology, Vermeer Corp. form strategic alliance Pellet Technology USA has formed a strategic alliance with Vermeer Corp. Under the terms of the alliance, Vermeer will serve as the exclusive supplier of the feedstock grinder to be used in Pellet Technology&rsquo;s patent-pending system to manufacture its PowerPellets product from stover, wood, energy crops and other agricultural residues. The Vermeer HG6000 horizontal grinder, complete with a patented Series II duplex drum, will be integrated with the Pellet Technology air-assisted feed system, allowing for higher moisture agricultural residue to be processed. The addition of the Vermeer horizontal grinder to the Pellet Technology USA design package provides a key component to the company&rsquo;s turnkey biomass processing solution.

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Busines Briefs

The Port of Amsterdam in the Netherlands already handles 1.5 million metric tons (1.65 million tons) of biomass every year, but that&rsquo;s not stopping it from making major handling, storage and infrastructure upgrades. By 2020, the port&rsquo;s managing director of the commercial department, Koen Overtoom, believes the volume handled will expand to 13.4 million metric tons per year.
 &ldquo;The Port of Amsterdam is strong in energy,&rdquo; Overtoom says. Most of the cargo shipped through the port consists of oil and coal, but based on several factors inside and outside of the Dutch country, Overtoom thinks the port&rsquo;s role in handling biomass will only get stronger.
 First, Overtoom points to the Dutch government&rsquo;s 2011 energy report, which includes proposals to make biomass use mandatory in the country&rsquo;s coal-fired energy plants. Second, the energy report calls for an increase in renewable energy from the 4 percent that has been used since 2010, to 14 percent by 2020. And third, Overtoom recognizes the impact other European countries&rsquo; energy strategies has on the Netherlands.
 Because Germany plans to phase out nuclear power stations by 2020, and the European Union has a greater focus on utilizing cleaner burning fuels, Overtoom says biomass imports at his facility will increase. By 2020, the Netherlands, Germany, Scandinavia and the U.K. will require 15 million metric tons of biomass per year.
 Hans Mattheyer, manager of the commercial department at the Bulk Terminal of Amsterdam, agrees with Overtoom. &ldquo;These developments will strongly increase Amsterdam&rsquo;s potential to play an important role in biomass logistics,&rdquo; he says. The bulk storage terminal already has five storage facilities under the cranes that can store up to 110,000 metric tons, and if or when demand increases, Mattheyer is prepared to expand using covered storage.
 The Port of Amsterdam also reports that a dry bulk cargo terminal operated by IGMA, a subsidiary of Cargill Inc., is negotiating with biomass manufacturers, making the most progress with a Georgia, U.S.,-based wood pellet supplier. IGMA plans to ship roughly 200,000 metric tons of biomass to Germany and the Netherlands by the end of the year, and the terminal company will build 5,000 square meters of storage.
 &ldquo;International energy companies are taking advantage of the favorable location and attractive business climate in the Netherlands to install new electricity production capacity,&rdquo; the Dutch government&rsquo;s 2011 energy report states. In addition to the Port of Amsterdam&rsquo;s activity regarding biomass import growth preparation, it is also working with the Port of Duisburg to redevelop a transshipment terminal for the storage and transfer of biomass for customers shipping from Amsterdam.
 In the Port of Delfzijl in the northern region of the Netherlands, energy developer Eneco is forgoing port development altogether, choosing instead to construct a 50 MW woody biomass power plant right at the port.
 Overtoom says he is confident that his port will grow based on future developments linked to biomass, including the port&rsquo;s specialized handling abilities. Given the 600-plus students who complete logistics courses in the Port of Amsterdam area every year, Overtoom&rsquo;s biomass perspective is strong.
&mdash;Luke Geiver

BURGEONING BIOMASS: Infrastructure at the Port of Amsterdam will be upgraded to handle more biomass. 


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The Port of Amsterdam is just one of many Dutch ports planning for biomass handling	

Dutch Ports Prepare 

For Mike Levin, flaring methane is at best a huge waste, and at worst a lost opportunity. Levin, the director of government affairs for FlexEnergy, the recent startup turned major biogas technology provider, is helping lead FlexEnergy&rsquo;s charge toward landfill gas-to-energy applications. If a recent Global Industry Analysis report detailing the potential for biomass and waste-to-energy is any indication, Levin and his team at FlexEnergy are heading in the right direction.
 According to the GIA report, global installed capacity of biomass and waste-to-energy plants was roughly 61.2 gigawatts (GW) in 2011, but by 2017, the global installed capacity will reach 83.1 GW. North America, according to the report, which used source feeds from market participants from solid waste management service providers to power generation companies, offers the largest market for biomass and waste-to-energy at 13.8 GW of installed capacity in 2011.
 FlexEnergy has already entered the waste-to-energy market in the U.S., and the Irvine, Calif.-based company provides a great example for other waste-to-energy companies that have expansion strategies. The team is using its FP250 turbine, a technology that combines electricity generation from a micro turbine with a thermal oxidizer, at a Santiago Canyon landfill site in California that has been closed since 1988. The site has been flaring methane for more than 20 years, Levin says, because the percentage concentration of methane was too low to run an engine or a turbine.
 The FlexEnergy system not only cuts down pollutants to nearly zero, but also uses the heat in the oxidizer to power the turbine. While a typical turbine requires 30 to 40 percent methane, the FlexEnergy technology can create electricity using a much lower percentage.
 &ldquo;If all goes as planned, we are actually going to shut the flare off,&rdquo; Levin says of the work at Santiago Canyon. &ldquo;We are going to take all of the methane that is there and put it into eight FP250 systems for 2 MW of electricity generation.&rdquo; That is enough electricity to power 1500 homes. &ldquo;Our hope is that we can do what we are doing, where we shut the flare off, throughout California and eventually throughout the country,&rdquo; he adds.
 Those hopes might not be hard to fulfill. The FlexEnergy team has former U.S. EPA Administrator Stephen Johnson on the board of directors, and a New Hampshire manufacturing facility that is already planning an expansion.
 The GIA report acts as a back-up reminder that there is an opportunity for several FlexEnergy types to shut off the flare.
&mdash;Luke Geiver

FlexEnergy illustrates growth in global biomass energy capacity that may reach 83.1 GW by 2017


Flaring Potential

The Danish Government has launched an ambitious renewable energy strategy that will convert its energy and transport system by 2050. Ambitious, in this case, means 100 percent.
 For the coming decade, the strategy contains a range of concrete initiatives projected to lead to 36 percent renewable energy use by 2020, according to Ture Falbe-Hansen, head of media relations for the Danish Energy Agency. Milestone dates have been set for the years 2020, 2030 and 2035. By 2050, Denmark will be mostly fossil fuel free. The 2011 energy report noted that the exact optimum energy system for 2050 is uncertain, as there are far too many unknowns.
 What does this plan mean for biomass? According to Falbe-Hansen, coal covers about 40 percent of Danish electricity production and nearly 20 percent of district heating production. Coal consumption will be reduced by 65 percent by 2020, he says. &ldquo;The proposals will replace coal with biomass and initiatives to promote wind power.&rdquo;
 The Danish energy plan will stop any new buildings from using oil or gas-fired installations by 2013, with some exceptions, and also stop installation of oil-fired boilers in existing buildings by 2015. It will also provide funding for partnerships on strategic energy planning in municipalities for better use of resources like biomass.
 The plan to use more renewable energy is forecast to cover 23 percent of gross energy consumption by 2020, an increase of 33 percent from the amount used today.
 Although the energy plan for Denmark sounds great for the country, the possibilities don&rsquo;t end there. For the next six months, Denmark will take on the presidency role for the European Union. For Denmark, that means pushing for a Danish energy road map that will fulfill the long-term vision of a low-carbon and resource-efficient energy system by 2050. The goal of the roadmap, Falbe-Hansen says, is to illustrate the need for a common policy to develop European energy infrastructure and a sustainable energy platform.
 &ldquo;It is the responsibility of the presidency to move the work of the council forward and create results,&rdquo; he says.
&mdash;Luke Geiver

SWIFT SHIFT: Denmark plans to phase out fossil fuels completely.


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Denmark plans for 100 percent renewable energy use by 2050. 

A Perfect Plan 

In order to map out New Jersey&rsquo;s strategic vision for the use, management and development of energy in the state over the next decade, Gov. Chris Christie&rsquo;s administration spearheaded the crafting of an Energy Master Plan, released in early December.
 In conjunction with development of the energy plan, the New Jersey Board of Public Utilities established four working groups comprised of subject matter experts to provide the BPU with specific recommendations on various topics, including biomass.
 Biomass Work Group Co-Chair Gail Richardson, who is Vision Energy vice president for programs, says the group represents virtually all of the sectors in the state closely connected to the biomass arena&mdash;solid waste, management, wastewater treatment sectors and agriculture, as well as public utilities, engineering firms and others. &ldquo;So we feel that in tackling the important questions that the Board of Public Utilities posed to us, we have had a very good high-level input,&rdquo; she says.
 The mission of the BWG was to determine what New Jersey can do to incentivize bioenergy development, and report its recommendations for integration into the Energy Master Plan. The major recommendation the group made&mdash;which was adapted in the plan&mdash;was that the state take action under a new initiative to facilitate the rapid construction and operation of renewable biomass facilities to produce electricity and vehicle fuels.
 That recommendation stems from the fact that biomass energy potential in New Jersey is substantial. According to an assessment ordered by the BPU, New Jersey produces an estimated 8.2 million dry tons of biomass annually, approximately 65 percent of which could be available for energy production. The plan points out that agricultural and forest residues, along with municipal and industrial waste, are underutilized resources that could be used to fuel power plants. The amount of biomass in the state could deliver up to 1,299 MW of power, approximately 9 percent of its electricity demand, according to the plan.
 Findings in the plan will be used to facilitate the development of energy from biomass, including the assessment of current state incentives and implementation of new ones. The plan notes, however, that practicality and cost effectiveness should be investigated and confirmed before any substantial new incentives are implemented. That includes the development of an objective and systematic process of sustainability determinations that will facilitate environmental permitting.
&mdash;Anna Austin

COST COMPARISON: Biomass energy in New Jersey is considerably cheaper than offshore wind, solar PV and advanced nuclear energy.

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New Jersey's new energy plan raises the biomass bar

Biomass in the Garden State   

From fuel binders for space shuttle rocket boosters to brake pads and deck paint, products manufactured at the chemical complex in Louisville, Ky., are used in a wide variety of applications. Aptly dubbed &ldquo;Rubbertown,&rdquo; the area exploded with activity during World War II, when the U.S. Office of War Production contracted several companies in the complex for the production of synthetic rubber used to make tires for ongoing war efforts. Since then, ownership of the facility has changed hands several times, and it has continued to house a multitude of different chemical companies.
 The area isn&rsquo;t known for having an impeccable environmental footprint, but is switching gears, as a new biomass energy system will replace the complex&rsquo;s coal-fired boiler house. Not only will it help lower emissions, but it has come to the rescue of the complex&rsquo;s remaining tenants, ensuring their continued operations while preserving the jobs of hundreds of employees.
 A multi-faceted partnership involving Kentucky state officials, Recast Energy Corp., Zeon Chemicals, and Lubrizol Corp. has made this developing project possible. Recast has impressed its partners with its ability to tip-toe around the existing companies, allowing them to continue operating while the conversion moves full-steam ahead.
 Do or Die
 Specialty elastomer manufacturer Zeon Chemicals has occupied the complex since 1989, and was joined by Lubrizol Corp., maker of latex and CPCV (chlorinated polyvinyl chloride) resins, in 2004. They and two other companies remained in the complex in 2009, each owning a portion served by a single-utility boiler house operated by one of the companies.
 In February of that year, Zeon and Lubrizol were notified that the chemical company that owned and operated the boiler and sold utilities to the other tenants was shutting down its operations there. &ldquo;They had no interest in continuing to operate the boiler,&rdquo; says Zeon Chemicals President and CEO Tom Gettelfinger. &ldquo;So we were just kind of left high and dry. When they gave us notice, they basically said that within a year, we would have to figure out what we would do to get the steam we need to run our process.&rdquo;
 That couldn&rsquo;t have happened at a worse time for the company, according to Gettelfinger. &ldquo;We were in the midst of a severe recession that hit our business hard, so it was difficult to justify keeping our plant open by investing millions to set up a new boiler,&rdquo; he says. &ldquo;And it isn&rsquo;t as if we would have been investing in process equipment that would generate more product.&rdquo;
 Taking over the boiler house wasn&rsquo;t a fit for the remaining chemical companies either, so Zeon knew it would have to look elsewhere for help. In the same boat, Lubrizol joined the effort to find an alternative solution. &ldquo;We had discussions with Recast a few years ago about supplying steam to our Mississippi plant, and so we knew they were already in the business,&rdquo; Gettelfinger explains. &ldquo;Since we wanted to focus on our particular product lines and not utility product, it was a good fit.&rdquo;
 Recast Energy currently operates cogeneration facilities in the Dominican Republic and Mississippi, and has several projects under development in other U.S. and Caribbean locations. The company began conducting feasibility studies for the conversion over the following year, and with the help of local and state officials, the companies involved were able to sign a deal in July 2010, according to Recast Energy Executive Vice President and Chief Financial Officer Brandon Ogilvie. Since then, the project has been on a smooth and steady path to success.
 Out With the Old
 Sam Striegel, plant manager of Lubrizol&rsquo;s Louisville location, explains that the boiler house purchased by Recast contained a coal-fired boiler that would be converted to biomass, as well as a natural gas boiler for back-up. That boiler is currently being operated, and an additional natural gas boiler has been rented as back-up. &ldquo;As a result, we&rsquo;ve been able to operate without any significant issues,&rdquo; he says.
 While it may have been easier to keep the natural gas-fired boiler, he says biomass was more appealing for a few reasons, one being its carbon emission reductions, and the other its more predictable price. &ldquo;Coal and natural gas can be quite volatile, which creates significant swings in our energy costs,&rdquo; Striegel says. &ldquo;With biomass, while we will see steady increases in pricing, we expect the price of the fuel to be much more stable and predictable in the long run and at a lower cost than fossil fuels.&rdquo;
 Ogilvie emphasizes the complicated but beneficial nature of performing the retrofit around a live boiler house. &ldquo;It&rsquo;s not as though we were able to take two acres off the side, build the project, tie it in and turn it on,&rdquo; he says. &ldquo;We&rsquo;re conducting it while the plant is live, while the water and steam pipes are hot.&rdquo;
 While some equipment will be upgraded, other equipment has to be gutted and replaced completely. &ldquo;Coal and wood are both solid fuels, but there are significant differences in materials handling aspects and the combustion aspects,&rdquo; Ogilvie says. &ldquo;Coal is much more energy dense than wood; one pound of coal contains a lot more energy than one pound of wood. You have to put about three times the amount of wood through the system to generate the same amount of energy.&rdquo;
 Existing conveyor belts and fuel handling systems for coal are grossly undersized for wood, he adds. &ldquo;We basically ripped out the entire fuel handling system.&rdquo;
 As the whole unit itself is being converted to burn biomass, major changes are primarily being made to the combustion system, modifications that will allow it to sustain a burn of 100 percent wood. &ldquo;To burn coal, you need far less air than wood,&rdquo; Ogilvie explains. &ldquo;Wood has a lot more moisture in it, and therefore needs a lot more air to help drive it off.&rdquo;
 In addition, the ash handling system was replaced and two of the four original boilers were torn out, resulting in about one-third of the facility being demolished or moved out of the way to make room for new equipment. While these mechanical changes are a significant part of the conversion, there are a few other important components, one being securing new fuel sources.
 More Project Pieces 
 The project is a different order of magnitude than a 50 MW power plant requiring 350,000 tons of fuel each year, Ogilvie points out, and even though it will only require around 75,000 tons per year of woody biomass, that feedstock is an important piece of the puzzle. &ldquo;We&rsquo;ve been working with local companies that have existing chipping and processing equipment, and companies that are hired to remove tree branches from power lines or to clean up storm debris,&rdquo; he says. &ldquo;There&rsquo;s also some logging activity in the area that can provide tree tops, branches and other residuals, as well as some area sawmills. It will be predominantly residues.&rdquo;
 While most companies don&rsquo;t have the cash to pay for conversions like this one, under Recast&rsquo;s business model, the company pays for the project and owns it, selling the energy back to the companies under a long-term contract. The revenue generated from energy sales justifies the investment. Additionally, the Kentucky Economic Development Finance Authority has preliminarily approved Lubrizol and Zeon for tax incentives up to $1.75 million each through the Kentucky Reinvestment Act, a program designed to assist companies that need to make significant capital investment in Kentucky facilities in order to remain competitive and retain existing workforces.
 Unfortunately, the project won&rsquo;t qualify for any state renewable energy programs. &ldquo;It&rsquo;ll just be producing steam and not electric power, and incentives tend to focus on electricity,&rdquo; Ogilvie points out. While the plant isn&rsquo;t generating electric power, it will provide all of the steam needed for the companies&rsquo; chemical manufacturing processes, heat the buildings during the cooler months, purify water, and provide other ancillary utility services. Recast is anticipating a commercial startup this month.
 Finally, and perhaps most important, in a state that has a 9.4 percent unemployment rate, the project is preserving and creating more than 350 jobs, including Recast&rsquo;s personnel on site and several dozen in the supply chain, aggregating and collecting the biomass. &ldquo;We have the manufacturing facility here, but we also have our corporate headquarters, sales and marketing and research and development groups here,&rdquo; Gettelfinger says. &ldquo;It&rsquo;s our biggest manufacturing location, and if we would have made the decision to shut the plant down, the direct jobs and all of the supported jobs would have been at risk. [The conversion] has assured us that we&rsquo;re going to be here, and we&rsquo;re happy campers again in this facility.&rdquo;
 Ogilvie points out that biomass conversions such as this one may be a solution for operations considering pathways to comply with the U.S. EPA&rsquo;s Boiler Maximum Achievable Control Technology (MACT) rules. &ldquo;One option may be to switch to natural gas, but they might not have access to that,&rdquo; he adds. &ldquo;A solution like this, where we can come in and retrofit a coal or oil unit to biomass, is one of the possible solutions for those facing that issue.&rdquo; Author: Anna Austin Associate Editor, Biomass Power &amp; Thermal (701) 751-2756 <a href="mailto:aaustin@bbiinternational.com">aaustin@bbiinternational.com</a>

Recast Redesign: An old coal-fired energy plant in Kentucky is being upgraded to burn biomass.


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COMPLEX COMMUNITY: The new biomass boiler will provide utility services to manufacturers in a Louisville, Ky., chemical complex.


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NEW VIEW: Portions of Recast Energy's plant need complete reconstruction for biomass conversion. 


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A biomass conversion in Louisville, Ky., will revamp a closed coal boiler house, saving and creating more than 350 jobs. 


Revitalizing Rubbertown 

Paul Eastman oversees all of Veresen Inc.&rsquo;s power facilities in Eastern Canada, including the first-ever municipal solid waste (MSW) and woody biomass-fueled system in the country. Prince Edward Island&rsquo;s (PEI) biomass district heating plant provides heat for more than 125 buildings in the capital city of Charlottetown, and 1.4 MW of power for internal use, as well as sale to the grid. The operation is a great example of why district heating systems fueled by biomass make sense.
 Eastman says Veresen acquired the PEI facility in 2007 because it made sense to buy a company with a wide moat around it, literally. PEI also has no threat of alternatives cutting away at its profits, he explains. The facility, which uses a small portion of heating oil, features long-term contracts that generate a steady cash flow, and uses readily available biomass feedstock to solve a somewhat complicated energy problem. &ldquo;There certainly isn&rsquo;t the ability to power anything with natural gas there,&rdquo; Eastman says.&nbsp;
 But even for Eastman, the story of the facility isn&rsquo;t about a company&rsquo;s successful realization that Prince Edward Island really did appear to have that large mote around it&mdash;in the form of the Gulf of St. Lawrence and the Northumberland Strait, both part of the Atlantic Ocean. For Eastman, and those before him involved in linking three separate biomass-based systems together to form the present day facility, it is about so much more.
 Three Become One
 Dave Godkin worked in Charlottetown at the University of Prince Edward Island back in the 1980s, when high oil prices and potential landfill issues were on the horizon for the province. Godkin, now the general manager for plant operator PEI Energy Systems, was instrumental in making the current district heating system what it is today. &ldquo;I started on the ground floor as they were building it up,&rdquo; he says of his time spent as an energy consultant and maintenance manager at one of the original biomass sites on the University&rsquo;s campus.
 Godkin helped the Province meet its goal of utilizing more biomass created from a then-stable forestry industry, as well as circumventing some of the concerns related to MSW. The MSW plant that came online in 1983 to provide power to a major hospital was the first facility on the island to use MSW for power, and then in 1986, a woody biomass-based district heating system was introduced to the downtown area to serve the Provincial offices and a number of other customers. By 1995, the island had added another biomass heating facility on the campus of the University of Prince Edward Island to serve not only the campus, but other surrounding buildings, as well.
 &ldquo;In the mid-&rsquo;90s, the province decided it didn&rsquo;t want to be in the district energy business anymore and went out for expressions of interest for someone to purchase the district heating system,&rdquo; Godkin says, adding that, perhaps more important, the province was looking for someone to commercialize the system.
 As part of the purchase agreement, the province stipulated that any potential buyer would have to further develop the MSW plant, upgrading the site to allow a merger of all three district heating systems into one large system, Godkin said. Robert Doyle, now a principle with FVB Energy Inc., a district heating developer that specializes in biomass utilization, had helped design one of the three biomass facilities. Doyle was certain the idea of upgrading the MSW facility with new biomass boilers on the same location was a great idea.
 In 1997, a company called Trigen purchased the three district heating systems and funded the upgrades, which, according to Godkin, happened in a fairly quick timeframe&mdash;one year&mdash;and included installation of six kilometers (3.7 miles) of underground pipe to connect the systems, new heat recovery equipment, and new air pollution control equipment. Since the upgrades, little has changed at the facility. &ldquo;One thing that has changed a little bit for us is the type of fuel used,&rdquo; Godkin says.&nbsp; When the main MSW and woody biomass facility first came online in 1997, the biomass feedstock was sawmill residue, but after an operational downturn at the sawmill, the plant needed another feedstock stream, Godkin says. &ldquo;We moved away from sawmill residue to forest chips from land clearing or residue left over from cutting,&rdquo; he says. &ldquo;That is basically where we sit today. That is one of the bonuses of district energy and large biomass facilities: you can switch fuels fairly quickly without a whole lot of trouble.&rdquo;
 The Real Story
 There was no question of whether Veresen&rsquo;s purchase of PEI Energy Systems' district heating plant and infrastructure was a promising endeavor. &ldquo;It looked profitable, it looked like it would continue to be that way and it looked like there was potential to grow over time,&rdquo; Eastman says. &ldquo;I think that is still true.&rdquo; But, he adds, the concept of district energy is odd and difficult to understand. Doyle agrees with Eastman&rsquo;s sentiment, adding that the biomass component of district energy needs to be outlined separately, because of its significant advantages.
 Doyle and Godkin agree that the benefits of biomass in a district heating system can outweigh the challenges created by linking businesses to residential buildings, and private sector energy budgets to public. They also agree that the PEI story proves that.
 Doyle&rsquo;s research into other systems also makes it difficult to argue with such claims. His team has completed a project to turn sawmill waste into heat for a downtown area of a British Columbia, Canada, city, and is currently working on other projects in British Columbia: one that will use sawmill waste to generate hot water for a central heating system at Prince George; and a wood waste-fired campus and residential heating system, both set to come on line this year. In Alberta, Canada, Doyle is developing a biomass pellet boiler for a water heating system, and is in the process of designing a biomass boiler in the Northwest Territories that could be operational in the summer of next year. &ldquo;There is a lot of interest (in biomass-based heating applications),&rdquo; Doyle says. &ldquo;I think district heating applications are good for biomass.&rdquo;
 Although Doyle&rsquo;s opinion might seem biased, he cites several compelling reasons biomass makes sense for district heating efforts, and why stories like PEI&rsquo;s should unfold everywhere.
 &ldquo;One of the challenges for biomass has always been that it&rsquo;s not as easy as turning on a natural gas boiler,&rdquo; he says. &ldquo;It is not as easy as going over to flick a switch.&rdquo; But, because biomass systems are more complex, combining a woody biomass system with an MSW system, as PEI and Godkin did, makes sense based on the requirements needed to operate an MSW facility, Doyle explains.
 &ldquo;MSW is even more complicated in terms of the combustion process, and a skilled operator who can handle MSW will also be adept at handling woody biomass,&rdquo; Doyle says. &ldquo;You have very knowledgeable operators (at an MSW facility), skilled people who on a daily basis are dealing with fuel quality issues, moisture issues, fuel feed issues, all of the things that make running a biomass or MSW system more difficult.&rdquo;
 But if a district heating system isn&rsquo;t already using MSW for fuel, woody biomass still makes sense, even though running a district energy system presents challenges. Those challenges, however, are related to capital, infrastructure and customers. &ldquo;It&rsquo;s not a technical challenge,&rdquo; Doyle says. The right combination of customers and capital is required to get a project started, he adds, noting that biomass feedstock and conversion technology are rarely issues. Thankfully, the PEI Energy system benefited from government support, Godkin adds.
 Doyle&rsquo;s reasoning for using biomass in a district heating system is also about the profile of the user. While some heating systems operating in pulp mills run at 60 to 90 percent capacity all day every day for 365 days a year, most, like Charlottetown&rsquo;s, aren&rsquo;t placed in the same operational conditions. Those systems in a mill don&rsquo;t have to cycle through huge swings during the day, Doyle explains, putting his point in perspective. &ldquo;In your house, you get up in the morning and turn the heat up; you go away for the day and you turn the heat down. So your load profile switched dramatically during the day for heating.&rdquo;
 Sound like a problem for commercial and residential buildings that might be considering a biomass-based heating system? Doyle would say no. Although a biomass boiler doesn&rsquo;t like huge load changes, the biomass-based district heating system benefits from the fact that typically there are enough customers and enough load base to justify full-time operators for at least 12 hours per day. Larger systems also make more sense, he says, as they allow larger stacks with filter systems, all of which help to justify the capital for a larger system.
 Add in the sustainability of biomass and the ability to create jobs, or in most places like Charlottetown that at one time relied on the forestry industry, save jobs, and Doyle says biomass-based district energy project development will only increase.
 To take part in that development, Godkin has his own advice: &ldquo;You&rsquo;ve got to be committed to it. You have to take a long-term view of your energy supply. I think that is one thing they were doing in PEI.&rdquo; Although Eastman and his team at Veresen believe they won&rsquo;t necessarily seek out projects involving biomass in the future, Eastman&rsquo;s plans for the Charlottetown facility show that his role in the story of Prince Edward Island isn&rsquo;t simply about his success in finding that moat.
 &ldquo;I think there is a huge opportunity to expand that facility,&rdquo; he says, based on the possibility to utilize a higher percentage of MSW. &ldquo;And there should be the economics to support expansion to the point where we could displace all of the oil that we burn at the facility.&rdquo; Author: Luke Geiver Associate Editor, Biomass Power &amp; Thermal (701) 738-4944 <a href="mailto:lgeiver@bbiinternational.com">lgeiver@bbiinternational.com</a>

PIONEERING ON PEI: Prince Edward Island's district heating plant is Canada's first MSW- and woody biomass-fueled energy facility. 

2012/01/13275243341264.jpg

WASTE WATTS: MSW is piled for combustion at Prince Edward Island's district energy plant. 



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WOOD CHIP WHEREWITHAL: Large bins hold the wood chips that will help fuel Prince Edward Island's district heating plant. 



2012/01/13275243811719.jpg

CO-COMBUSTION: PEI Energy Systems combusts both wood chips and MSW.


2012/01/13275243924883.jpg

A Canadian community merged three biomass plants into one big success story for district heat.

Combined Calefaction 

Does the utilization of wood for energy release as much pollution as energy from coal? Does it release more? Is it depleting our nation&rsquo;s forests and destroying natural habitats?
 These questions are hotly debated by scientists, foresters, bioenergy industry members and even the general public. While&nbsp; it&rsquo;s likely the real answers lie somewhere buried beneath a discombobulating mountain of studies, reports and whitepapers&mdash;many of which have been conducted with a very specific purpose or outcome in mind&mdash;it&rsquo;s left policymakers and landowners unsure about what&rsquo;s fact and what&rsquo;s fiction.
 A recently released study authored by nine scientists from multiple organizations&nbsp; and universities, including the U.S. Forest Service, may be poised to clear up some confusion. With no motive other than to scrutinize, hash out and compare the best and most recent science surrounding forests, climate change and bioenergy from a forest management perspective, the group is confident in its findings and hopes they will be accepted as the unvarnished truth.
 Carbon: Biogenic vs. Geologic
 The study &ldquo;Managing Forests Because Carbon Matters: Integrating Energy, Products, and Land Management Policy&rdquo; is an update to a previously released report initiated by the Society of American Foresters, and was put together by a task force of people who had all been involved in forest and carbon accounting aspects. It took about 10 months to complete, according to lead author Robert Malmsheimer, professor at the State University of New York College of Environmental Science and Forestry.
 Overall, the study has one major finding with a few main supporting conclusions. So what&rsquo;s the bottom line? &ldquo;As long as you manage forests sustainably, you can produce bioenergy and help address some of the issues surrounding climate change,&rdquo; Malmsheimer says, segueing into the first supporting conclusion. &ldquo;We can provide carbon benefits through both storage in forests and through substitution benefits, while providing all of the other benefits that forests normally provide society.&rdquo;
 The fact that it&rsquo;s not necessarily either/or is an important point, he emphasizes. &ldquo;We can still have the wildlife benefits, the recreation benefits and all the things people use forests for, all while still managing them for carbon.&rdquo;
 But that doesn&rsquo;t mean every forest should be managed for carbon. &ldquo;It&rsquo;s really the landowner&rsquo;s decision, but we wanted to be able to provide them with the correct scientific background so if they decide they&rsquo;re potentially interested in managing for carbon, they have that science available to help them decide,&rdquo; Malmsheimer says.
 The second main supporting conclusion of the study is that energy produced from forest biomass returns to the atmosphere carbon that plants absorbed in the relatively recent past, and therefore it essentially results in no net release of carbon.
 &ldquo;An important thing to think about here is that CO2 levels in the atmosphere have been relatively stable for hundreds of thousands of years,&rdquo; Malmsheimer explains. &ldquo;The issue we have in regard to climate change is that what we&rsquo;re doing is taking carbon that&rsquo;s been sequestered in the earth&mdash;from the start of the industrial revolution up until now&mdash;and we&rsquo;ve been emitting it into the atmosphere at such a rate that the atmosphere can&rsquo;t assimilate it.&rdquo;
 Simply put, burning coal takes geologic carbon&mdash;carbon stored in the earth&mdash;and adds it into the atmospheric cycle. When a tree sequesters carbon through photosynthesis, it&rsquo;s absorbing carbon that&rsquo;s already in the atmosphere. &ldquo;So when you are creating energy [with wood] you&rsquo;re using that atmospheric carbon and simply putting it back into the atmosphere; you&rsquo;re recirculating it. When you&rsquo;re producing energy from coal, you&rsquo;re taking stored geological carbon and adding more CO2 to the atmosphere.&rdquo;
 It seems like a simple concept, but people have a hard time grasping it, Malmsheimer says. &ldquo;When explained in this way, I think it makes a lot more sense to people.&rdquo;
 All of these ideas are only relevant, however, if forest inventories are stable or increasing. Is that really the case in the U.S.?
 Sustainable Forestry 
 &ldquo;It is the case, and has been for the last 70 years,&rdquo; Malmsheimer says. &ldquo;However, there are parts of the U.S. where it hasn&rsquo;t been the case for all of those years, so it depends upon the spatial scale you&rsquo;re looking at.&rdquo;
 When asked whether U.S. forests are being sustainably managed, study co-author Jim Bowyer of the University of Minnesota&rsquo;s Department of Bioproducts and Biosystems Engineering says yes and no. &ldquo;Yes because the forest area in what is now the U.S. is within one percent of what it was 100 years ago,&rdquo; he explains. &ldquo;Net growth nationwide has exceeded removals for over 70 years continuously, and as a result, standing timber volume has increased steadily over that period as well.&rdquo;
 At the same time, there are areas where forest inventories aren&rsquo;t necessarily stable or increasing, but it really isn&rsquo;t because too many trees are being removed for energy.&nbsp; &ldquo;Many forested areas, including much of the federally designated national forest lands, are not being managed at all,&rdquo; Bowyer says. &ldquo;Some of these areas currently support numbers of trees and overall biomass volumes that are well-above historic levels, a situation that is increasing the risk of serious insect infestation and disease incidence, and fueling rising incidence of catastrophic fire events.&rdquo;
 He adds that there are, however, instances of increasing fragmentation of forest lands due to expansion of urban areas and home development in forested areas. That trend could potentially threaten stability of forest-dwelling wildlife species, opportunities for management, and sustainable timber production.
 Moving away from forest management, another point in the study is that there are some real benefits to using wood in place of other materials. &ldquo;The study is really designed to try to specify what those benefits are,&rdquo; Malmsheimer says. &ldquo;One is that forest products require less fossil-based energy to be produced, and also, when you produce anything out of wood you&rsquo;re storing carbon for some length of time; sequestering it in whatever it is.&rdquo;
 The authors of the study do recognize that a large percentage of the future U.S. energy portfolio will come from a variety of sources, including wind and solar, but none of them sequester carbon, Malmsheimer points out. &ldquo;And, a lot of technologies still need a lot of work to be adapted on a widespread basis.&rdquo;&nbsp;
 When asked about how this study&rsquo;s findings compare with the infamous Manomet Center for Conservation Sciences study, which crafted a debt-then-dividend model for forest bioenergy carbon emissions, Malmsheimer says the Manomet study had a very specific purpose and a very specific question, which was answered. &ldquo;The problem with that study is that the question was wrong: what is the carbon accounting on a single plot of land? We don&rsquo;t manage just one plot; we manage hundreds of thousands of stands. Granted, some stands are just getting to a point of carbon deficit, and some are further away, but you have to look at multiple stands over long periods of time. It&rsquo;s impossible for [wood energy] to be worse than coal, because you have to go back to the very basic idea that with coal you&rsquo;re taking geologic carbon and putting it into the atmosphere.&rdquo;
 Though the team had the study in mind, Malmsheimer says it was not intended to be anti-Manomet. &ldquo;We believe we provide information in our report that addresses it directly, but we were much more interested in a broader look at forests and carbon accounting and wood products. There are a lot of people who have done those kinds of analyses and we didn&rsquo;t think it would be helpful to have one more.&rdquo;
 Instead, the study is intended to serve as a guide for not only landowners, but policymakers as well.
 Pushing for Sound Policy
 From Bowyer&rsquo;s perspective, policy shouldn&rsquo;t be influenced by anything other than science.&nbsp; &ldquo;In all environmental decision making, we need to move as rapidly as possible away from decisions based on intuition, emotion, and politics to decisions based on scientific, systematic and comprehensive assessment of the likely environmental impacts of possible alternatives,&rdquo; he says. &ldquo;One key is far greater use of life-cycle assessments (LCA) in environmental decision making.&rdquo;
 There is one caveat, Bowyer says. Assessments must follow international protocols for the conduct of life-cycle inventory and assessment, as spelled out in the International Organization for Standardization (ISO) 14000 series. &ldquo;Several recent studies of biogenic carbon emissions that have supposedly been based on LCA have completely ignored established protocols, with the result that their findings are completely meaningless. Nonetheless, they have still been dutifully reported in the media.&rdquo;
 Malmsheimer says the group is working on publicizing its study, and perhaps most important, getting it into the hands of policymakers. Because studies such as this one generally have a technical nature and are oftentimes difficult for congress members to fully comprehend, Bowyer has authored a nontechnical, 15-page version through Dovetail Inc., an authoritative information company focused on the impacts and trade-offs of environmental decisions, including consumption choices, land use, and policy alternatives. &ldquo;Realizing that most decision makers at all levels of government are, in fact, not scientists, we prepared the Dovetail summary with the goal of bringing a summary of recent science on forests and carbon balances to those people so as to provide a basis for reasoned and informed debate,&rdquo; Bowyer says.
 As to whether he thinks the study will influence policymakers, Malmsheimer says the team hopes so. It has sent a copy of the study to state landowner organizations and is working on a two-page summary for Capitol Hill. &ldquo;We&rsquo;ve learned it&rsquo;s not &lsquo;if you build it, they will come,&rsquo;&rdquo; he adds. &ldquo;You have to build it, and then bring it to them.&rdquo; Author:Anna Austin Associate Editor, Biomass Power &amp; Thermal (701) 751-2756 <a href="mailto:aaustin@bbiinternational.com">aaustin@bbiinternational.com</a>

A study by a group of forest scientists confirms forest-derived bioenergy results in no net carbon release

Words from the Wise

Nonfood cellulosic materials such as corn stover or wood biomass may receive much feedstock attention in the advanced biofuels and biobased chemical projects, but companies such as New Zealand-based Aquaflow Bionomics Corp., together with Texas-based catalyst developer CRI Catalyst Co., believe that taking a multi-biomass approach to include algae in the mix will maximize the true biorefining potential to market.
Both companies are testing and evaluating projects that bring together Aquaflow&rsquo;s unique algal capability using an integrated hydropyrolysis and hydroconversion (IH2) technology for the production of green gasoline, diesel and jet fuel. CRI acquired the exclusive global sublicensing rights for the IH2 technology from Des Plaines, Ill.-based nonprofit organization Gas Technology Institute where the technology was originally developed.
According to GTI, IH2 technology is an advanced pyrolysis technology that uses low-pressure hydrogen together with a proprietary catalyst supplied by CRI that removes virtually all of the oxygen found in biomass and produces finished cellulosic gasoline and diesel hydrocarbon blendstocks. No external hydrogen is required because what&rsquo;s needed is produced in process. Since the process produces its own hydrogen and a surplus of water to be self-sufficient, the IH2 technology is capable of operating in a stand-alone configuration or can be integrated into existing industrial biorefining applications. According to GTI, yields have ranged from 26 to 46 percent depending on the feedstock used.
Since last year, GTI and CRI have collaborated on refining GTI&rsquo;s IH2 technology when GTI received funding from the U.S. DOE&rsquo;s Energy Efficiency and Renewable Energy Office of Biomass Program under the integrated biorefinery initiative to support a pilot project in Des Plaines. Aquaflow and CRI have supported this development with their participation in the DOE-funded project. Other participants, besides CRI and Aquaflow, are Cargill Inc., Johnston Timber, Blue Marble Energy, National Renewable Energy Laboratory and Michigan Technological University. Outside the scope of the DOE-funded project, GTI anticipates scaling up to a 1-ton-per-day pilot facility, which is expected to open in 2013 with commercial introduction of the technology expected by 2014.
&ldquo;Initially, we&rsquo;ll focus on setting up a demonstration facility, most likely in the U.S., and from this base we will expand into the project opportunities currently in the Aquaflow pipeline across a number of geographies,&rdquo; says Aquaflow director Nick Gerritsen.
Gerritsen says Aquaflow and CRI have developed a strong partnership and a shared vision for the future of renewable fuels, adding that the agreement with CRI is the culmination of four years of work that Aquaflow has been doing behind the scenes. &ldquo;Aquaflow is one of the first companies in the world to take this broader approach to incorporate algae in feedstocks to enable the near-term production of drop-in fuels and chemicals,&rdquo; Gerritsen says. &ldquo;This approach gives us the flexibility to develop a multi-biomass feedstock mix specific to available resources worldwide. We believe this is a significant advance for algal biofuels over lipid extraction approaches to diesel and jet fuel.&rdquo;
&mdash;Bryan Sims

Diversified inputs in novel thermochem platform drive commercialization 

Gateway to a Multi-Biomass Approach

Forming a strategic partnership, joint venture or collaborative agreement with a major oil company isn&rsquo;t a new concept for emerging biorefining firms in the effort to deliver advanced drop-in biofuels and biobased chemicals to the commercial marketplace. In fact, for many the move is a necessary&mdash;not an optional&mdash;business decision. This was precisely the approach Madison, Wis.-based Virent Energy Systems took when it established a strategic partnership with Royal Dutch Shell in 2007 as Virent and Shell Hydrogen LLC, a Shell subsidiary, first launched a five-year joint development project to develop biomass-derived hydrogen systems designed for fueling station applications, says Greg Keenan, vice president of business development and engineering for Virent.
&ldquo;Historically, strategic partnerships have been always been a part of Virent&rsquo;s business plan right from the beginning,&rdquo; Keenan tells Biorefining Magazine. &ldquo;We initially viewed it as we need to find partners to validate and really be the voice of the customer. I think that&rsquo;s one of the great parts of the partnership we have with Shell.&rdquo;
Co-founded in 2002 by Randy Cortright, Virent&rsquo;s current chief technology officer, and James Dumesic, professor at the University of Wisconsin-Madison, Virent deepened its relationship with Shell and refocused its business strategy in 2008 to produce advanced biofuels such as drop-in biogasoline and light and heavy biobased distillate fuels such as diesel and biojet fuel, in addition to biobased chemicals, derived from soluble plant sugars via its patented catalytic BioForming technology. Invented by Cortright and Dumesic, Virent&rsquo;s BioForming technology platform combines aqueous phase reforming (APR) and traditional petroleum refining technologies to generate hydrocarbon molecules that look and perform similar to petroleum-based fuels and chemicals.
In June 2010, Virent closed on a $46.4 million Series C equity round led by Shell with strong participation from existing partners such as Cargill Inc. and Honda. With its new equity stake, Shell acquired a seat on Virent&rsquo;s board of directors. The financing followed a milestone in March in which Virent announced the successful startup of its 10,000-gallon-per-year &ldquo;Project Eagle&rdquo; demonstration facility in Madison.
Understanding that the company&rsquo;s current and future successes and milestones aren&rsquo;t exclusively reliant upon its strategic partnership with Shell, Keenan points how fast and more efficient the company is able to grow and mature alongside a major oil company like Shell. When Virent initially engaged Shell, he says, Virent only had about 20 people on staff. Keenan says today the company has roughly 120 employees, and he adds that Virent spent a lot of time and resources early on putting together a solid proof-of-concept prior to approaching Shell that, in the end, would ultimately provide a competitive advantage for the young biorefining firm.
&ldquo;From 2007 to 2009, Virent went from proof-of-concept to product demonstration,&rdquo; Keenan says. &ldquo;That&rsquo;s unheard of in this industry. A company like Virent can&rsquo;t do that by itself. It really was a combined effort.&rdquo;
When the company first started testing its biogasoline, according to Keenan, the fuel could only be used in lawnmowers and that&rsquo;s it. But, through technical validation and analysis, Virent was able to move quickly and optimize its fuel product because of Shell&rsquo;s robust technical and market resources, not only domestically, but also globally.
&ldquo;Back in 2007, when we solidified our partnership with Shell, there was a stigma on small start-up biorefining companies that it was risky to align themselves with big energy companies&hellip;that they would get lost in the shuffle or get squashed,&rdquo; Keenan says. &ldquo;We decided that was a risk we were willing to take and the rewards far outweighed the risks. We actually saw it as, if we didn&rsquo;t partner with an energy company, that would be riskier than partnering with an energy company.&rdquo; Multi-Pronged Benefits
While the partnership between Virent and Shell may be primarily driven by commercializing Virent&rsquo;s technology and its bioproducts, Virent CEO Lee Edwards points to three broad categories where Shell has enabled Virent to accomplish milestones over the course of the partnership. Edwards took the helm as Virent&rsquo;s CEO in 2009 after a 25-year career holding several different executive positions while working for BP. Edwards is also chairman of the Advanced Biofuels Association.
The first, Edwards says, is access to funding for Virent to be able to invest in research and development in order to demonstrate scalability, yield and commercial benefit of the company&rsquo;s technology.
&ldquo;Our relationship with Shell has been strong and increasing since 2007,&rdquo; Edwards says. &ldquo;That, in part, is reflected in the funding that they&rsquo;ve done to help our research and development and, most recently in May 2010, invested in our company as an investor. That&rsquo;s clearly provided resources that we desperately need to deliver the full potential of the technology.&rdquo;
It&rsquo;s this added funding, Edwards says, that enables biorefining firms such as Virent to accelerate a development cycle in order to meet joint, prescribed milestones.
&ldquo;We respect the size, strength and thoroughness of Shell, but as a startup, we are urgent and must move quickly and learn as quickly as possible so that we can continue to make progress,&rdquo; Edwards says. &ldquo;We work with the understanding that the nature of the risks and the investment uncertainties for big oil companies like Shell and others all need to be balanced with the urgent startup mentality that we need to prove and move rather than be complacent and just wait.&rdquo;
The second is, given that Virent and Shell are collaborative partners, a large company like Shell understands the energy markets on a global basis like no other regarding long-term planning perspectives, intimate understanding of the supply chain, economics, engineering and technology, particularly as a global player in refining and marketing, something that Edwards says &ldquo;is important because they provide a great deal of capability that doesn&rsquo;t come from Virent expenses, but comes from their willingness to co-invest to help us, based on programs that we&rsquo;ve worked on together with their technology teams based in Houston, Amsterdam and the U.K.&rdquo;
Edwards adds, &ldquo;They&rsquo;ve also been helping us a great deal on engineering and design. In some cases we would pay for this through third parties and in other cases you wouldn&rsquo;t be able to access the capability that companies like Virent can access through strategic partnership collaboration.&rdquo;
Admitting that it may be a bit esoteric, Edwards says how his third point illustrates that his company&rsquo;s partnership with Shell provided it a significant degree of endorsement of potential and confidence within the biorefining sector; something that gives Virent an edge within a competitive and emerging market.
&ldquo;In other words, it enables Virent to accelerate and attract additional investors who may see [the partnership] as a risk-mitigator&mdash;&lsquo;Well, if Shell is investing it&rsquo;s easier for me to say yes because of the nature of what we&rsquo;re doing and the scope of the opportunity that I see in Shell in terms of being a long-term investor in deploying the technology at scale.&rsquo;&rdquo; Another important area Edwards highlighted as a valuable benefit that comes with working alongside a major oil company is that Shell has extensive wherewithal when it comes to policy, and not just in the U.S. Shell is actively involved in energy policy globally and while Virent is focused on initially deploying its technology commercially in the U.S., Edwards says that with Shell&rsquo;s help, it will be more educated on compliance issues prior to deploying its technology and delivering its future product to unfamiliar markets abroad.&nbsp;
&ldquo;As a global player, they have a combination of market opportunity for new manufacturing and products that new customers will ultimately want, and they also have compliance obligations that are emerging based on regulatory and policy mandates,&rdquo; Edwards says. &ldquo;Their interest is to remain compliant and be able to offer new products given their strategic interest in providing transportation fuels to the marketplace, and biofuels in general is a new opportunity for growing their own margins in manufacturing.&rdquo; Milestone Achievements
Although Virent has already completed a number of significant milestones in its young history, the most notable accomplishment to date thanks to its collaboration with Shell, according to Kennan and Edwards, come from those that have validated Virent&rsquo;s biogasline for performance testing in real-world applications. These types of tests, according to Keenan, are tangible examples of how Virent&rsquo;s vision is coming to life because of its partnership with Shell.
For instance, Virent and Shell conducted a summer-long testing program in 2010 where Virent&rsquo;s biogasoline was blended into fuel supplied by Shell to fuel 10 different vehicles, which compared Virent&rsquo;s product to traditional petro-based gas. Shell used five identical pairs of late-model European cars for the road trial. Five cars used a baseline Shell gasoline. Each car was driven several thousand miles over the course of 2010. After the test, each engine was disassembled and inspected. The test determined that Virent&rsquo;s biogasoline didn&rsquo;t cause any harm to the vehicles in comparison to Shell&rsquo;s baseline fuel. Virent followed up the test with another in August that included Virent&rsquo;s biogasoline blended into fuel supplied by Shell to Scuderia Ferrari for the last three races of the 2010 Formula One championship.
&ldquo;I think the use of the fuel in a very technical application such as in the Ferrari Formula One racecar was a highlight for the company because it really demonstrated the fuel we&rsquo;re producing is truly a replacement drop-in molecule that has high quality,&rdquo; Kennan says. &ldquo;That was very exciting.&rdquo;
According to Edwards, Virent intends to build on successful milestones such as these to accomplish more in the future with Shell. &ldquo;We&rsquo;re naturally restless,&rdquo; Edwards says. &ldquo;We want to keep making progress and move on to the next challenge.&rdquo; Author: Bryan Sims Associate Editor, Biorefining Magazine (701) 738-4974 <a href="mailto:bsims@bbiinternational.com">bsims@bbiinternational.com</a>

Shell's collaboration with Virent Energy Systems is propelling the firm to new heights in biorefining

Synergy by Design

The call from President Obama for the U.S. to develop a clean energy economy seemed like the perfect rallying cry for rival energy crop companies and competing advanced biofuel developers, giving virtually everyone in the bioenergy world an idea to agree on. That idea, to move away from nonrenewable energy sources, to create jobs through wind farms, solar complexes, biomass power plants or biorefinieries seem to include the oil majors. But Sue Ellerbusch, president of BP Biofuels North America, didn&rsquo;t care, and she didn&rsquo;t need a call for action from the president. Ellerbusch, who has been with BP for 20-plus years mostly in the chemical and the fuels industries, joined the biofuels business five years ago at BP when she says it was about a dozen people in the U.K. trying to figure out who or what they wanted to be. &ldquo;I came to the U.S. four years ago to really make what we wanted to be on a piece of paper a reality,&rdquo; she tells Biorefining Magazine.
That reality for Ellerbusch, who admits she gets passionate about and excited to explain, is all about cellulosic ethanol production and her team&rsquo;s quest to make it happen in the U.S. Ellerbusch discusses her passion, her role as president of a company whose name doesn&rsquo;t seem to fit with the word biofuels and what she believes BP&rsquo;s presence in the biofuels landscape can mean for the country&mdash;and how it might play into that idea of a clean energy economy. She talks about the story of Highlands Ethanol and what it reveals about BP Biofuels&rsquo; dedication to the advanced biofuels industry.&nbsp; Green Beginnings
The best way to describe the landscape of Highlands County, Fla., is with images of vast green, grassy fields, grazed through by roaming cattle or matted down by heavy rain, scrub trees scattered across the land in no relevant pattern and marsh acres mingled throughout. The story of Ellerbusch and her team starts there&mdash;sort of. Through a partnership that includes one of the country&rsquo;s largest landowners, BP Biofuels is working to build a cellulosic ethanol facility that many may not even know of, which will put roughly 20,000 acres previously unused or unable to sustain consistent agricultural practice into use as an energy cane farm, and a location for a 1,000-ton-per-day, 36 MMgy cellulosic ethanol plant. The facility represents the center of Ellerbusch&rsquo;s current universe.
Chuck Grawey, general manager for the Highlands project, says the venture is made up of the best of both worlds, and he even says that the team is solving problems that other competitors don&rsquo;t even know they have yet. As Grawey infers, the work at Highlands is a team effort, and although the facility will be the first advanced biofuel production site ever constructed in the U.S. by an oil major, the story of BP Biofuels is also about a demonstration facility in Jennings, La., and a global technology research and development site in San Diego. Or, as Ellerbusch says, the story of Highlands shows that even companies with a &ldquo;B&rdquo; and a &ldquo;P&rdquo; in the name believe that cellulosic biomass has a place in the renewable fuel pool. To the critics, Ellerbusch says: &ldquo;This is an industry that is ready to be built up, and the technology is viable today. We are making cellulosic ethanol in Jennings&nbsp; so we know it can work,&rdquo; she says. &ldquo;We are proving that the feedstocks exist and you can farm this and make it very viable&mdash;and I want people to know that.&rdquo;
The facility in Jennings, which BP bought from then partner Verenium for $98.3 million, gave Ellerbusch and her team a unique opportunity, she says, which was also something they were focused on well before the disaster in the Gulf. In addition to the 1.4 MMgy demo facility, BP also acquired the rights to research and development facility in San Diego, now named BP Biofuels Global Technology Centre. &ldquo;With San Diego and Jennings, we have the ability to prove things out at a small research scale and then we can bring it to an operating facility and scale it up, and learn about operations that then transfer to an engineering team.&rdquo; She says the engineers can then use all that information in combination with BP&rsquo;s long heritage of engineering and constructing refineries across the world to design and build the Highlands facility. &ldquo;It is a unique capability in the industry,&rdquo; she says, &ldquo;and one that we are trying to continue to build on and leverage within the U.S.&rdquo; It&rsquo;s that sentiment that helps reveal the passion of Ellerbusch and why her role as president could last longer than the time it takes to build the facility in Florida. &ldquo;We can build a series of units along the Gulf Coast so that we can bring this industry to material scale as soon as possible,&rdquo; she says. Major Perspectives
Say what you will about the oil major&rsquo;s involvement with biofuels, but according to Ellerbusch, the story of Highlands highlights what the energy giant thinks about biofuel use in the future. That story, however, isn&rsquo;t just about what she and Grawey think&mdash;it&rsquo;s about what they&rsquo;ve learned.
Twenty years spent in the chemicals and fuels business didn&rsquo;t leave a lot of time for Ellerbusch to spend in the agricultural sector, but her time in Florida, San Diego and Jennings has helped her catch up. &ldquo;I didn&rsquo;t know anything about farming before I came into this role,&rdquo; she tells Biorefining Magazine, &ldquo;and I&rsquo;ve been tremendously impressed about the quality of people in that industry, their entrepreneurial nature and their real desire to bring a domestic energy source to the U.S.&rdquo;
Lykes Bros. Inc., an agricultural partner in the Florida project and also one of the largest private landowners in the U.S., is one of the farming groups that Ellerbusch says her team has learned a lot from. Joe Collins, vice president of Lykes Bros., says he knew about growing energy crops for a long time, and the partnership with BP gave his company a reason to grow in Florida. Along with Lykes Bros., Ellerbusch says other farmers and landowners in the U.S. that she has met with have been really interested in trying to find a way to help create the new 12- to 15-foot tall energy cane farming approach, an effort that is a project in itself, she says. And it makes sense, given Ellerbusch&rsquo;s indication of the impact of what such a farming approach and fuel production area could mean to the communities that adopt such practices; jobs and the resulting regional economic impact that come from them, or, as she characterizes it, the most exciting part about her biofuels work.
The team in Florida will have planted 1,500 acres by year&rsquo;s end, and completed the preparation for 3,500 acres. Even as Ellerbusch was learning, she explained that owning the intellectual property and technology rights to the entire technology process, combined with her company project&rsquo;s own farming model, does certainly give BP an advantage that very few other advanced biofuels companies can match. But she still sees the importance of partnering.
&ldquo;I think this is an industry that will be built off of partnerships,&rdquo; she says. &ldquo;We chose to purchase our partner out, but when we first came together, we had envisioned the possibility of being in biofuels, but we never really had a way of getting there because we didn&rsquo;t know the technology, we didn&rsquo;t have any projects, and we didn&rsquo;t have any feedstocks&mdash;so we found somebody that did.&rdquo; She believes the partnerships between the oil majors that have already developed will only continue, a trend she says &ldquo;is another proof point for the legitimacy and ability of this industry starting to form.&rdquo;
It might seem like a perfect world for Ellerbusch, given the resources she has that include nearly every project developer&rsquo;s wish-list items: an R&amp;D facility, a large demonstration-scale facility to test out the work at the R&amp;D facility, a farming model and the land to grow, and the heritage of a company with a nearly unrivaled ability to build facilities that take something in and churn product out, product that can affect a global marketplace, on top of two letters&mdash;BP&mdash;that would seemingly excite anyone to work with her team for name recognition alone. But Ellerbusch explains that this would be wrong because even BP needs to know that its products have a secure endpoint. &ldquo;This is a nascent industry and we do need to see stability,&rdquo; she says. &ldquo;We are not going to invest with the hope of something&mdash;we need to see that there is a viable market.&rdquo; The main thing they hope to see, she says, is a stable federal renewable fuel standard. And for other companies without the B and P in their name, they need this too.
&ldquo;We need to see a clear path to the fact that there will be required volumes, targeted volumes for cellulosic,&rdquo; she says. And for those who argue cellulosic fuels will never be, she would point to corn-based ethanol. &ldquo;Give it some time,&rdquo; she says. &ldquo;They had 30 years and we have had four,&rdquo; referring to her work at BP. From her perspective, very few game-changing technologies are born overnight, so she wants people to realize that the industry is still in its infancy. &ldquo;Don&rsquo;t think you can kick us out of the house and tell us it&rsquo;s time to feed ourselves, we are not ready to do that yet, we need a little bit of support.&rdquo;
An oil major asking for support, however contradictory, seems to fit the status quo, but Ellerbusch argues that what her team is doing isn&rsquo;t about the now, it&rsquo;s about the tomorrow, a time when each site will create more than 200 permanent jobs and 600 to 800 construction jobs during the build.&nbsp; &ldquo;I just ask people to believe in the idea that you have companies like us and others that are really making progress,&rdquo; she says. The Highlands facility will begin major construction in 2012, which means the story of BP Biofuels is far from over. One could say it has only just begun. Author: Luke Geiver Associate Editor, Biorefining Magazine (701) 738-4944 <a href="mailto:lgeiver@bbiinternational.com">lgeiver@bbiinternational.com</a>

Perspectives from the president on RFS2, Florida and green beginnings

The BP Biofuels Story

While members of the first-generation biofuels industry and those in the petroleum industry have too often been poised as competitors, the growing presence of petroleum companies in the advanced biofuels sector is actually helping many startups expedite the scale-up process. One company that has traditionally been active in petroleum refining has been particularly supportive of second- and third-generation biofuel companies. Valero Energy Corp. has made investments in a variety of biorefining operations that target the production of a wide range of fuel molecules.
Valero first entered the biofuels space several years ago, and purchased a total of 10 corn ethanol plants. &ldquo;We realized that ethanol was going to be an important part of the fuel mix going forward in this country; that the demand for ethanol wasn&rsquo;t going away,&rdquo; says Bill Day, Valero&rsquo;s executive director of media relations. &ldquo;So, Valero looked for a couple of years for opportunities to get into the ethanol production business. We were required as a refiner to have ethanol in our gasoline.&rdquo;
Although Valero is an independent petroleum company, Day stresses that his company does not consider itself an oil company. &ldquo;We are a fuels company,&rdquo; he says. &ldquo;We figured we might as well be on the production side of [the biofuels industry], rather than just the buying and blending side.&rdquo; After purchasing 10 plants out of bankruptcy, Valero is now one of the nation&rsquo;s largest ethanol producers.
Since then, the company&rsquo;s interest in biofuels has expanded to include next generation technologies. &ldquo;We are making some selective investments in next-generation biofuels technologies,&rdquo; Day says. &ldquo;We have some investments with companies that are making things like synthetic fuels from algae, or making fuels from landfill waste. We have some investments in companies that are working on cellulosic ethanol technologies, and we are working with a company called Darling International to process a type of renewable diesel fuel at one of our petroleum refineries.&rdquo;
Day explains that Valero doesn&rsquo;t do a lot of research and development itself; however, the refiner does make a lot of investments with companies that are actively pursuing the development of new technologies. To date, Valero has made investments in the Darling International Diamond Green Diesel project, Solix Biosystems, Mission NewEnergy Ltd., Terrabon Inc., ZeaChem Inc., Mascoma Corp., Enerkem Inc., Algenol LLC and Qteros Inc. Motivating Factors
According to Day, a primary motivation behind Valero&rsquo;s investments is its desire to take part in the future of the fuels industry. &ldquo;We want to make sure that whatever comes next, Valero is part of it,&rdquo; Day says. &ldquo;I don&rsquo;t thing anybody is certain yet what the fuel of the future will be, but all these technologies are very exciting and any of them has a chance to be an important part of the way Americans make transportation fuel.&rdquo;
&ldquo;We think of ourselves as a fuels manufacturer,&rdquo; Day continues. &ldquo;We take in a raw material, whether it&rsquo;s petroleum, corn, animal fat, wood pulp or switchgrass. We turn that raw material into valuable clean burning transportation fuels. We are not an oil company, we are a fuels manufacturer. Whatever the future is going to be, Valero wants to be part of that future.&rdquo;
According to Day, Valero looks for investment opportunities with companies that have good track records, both in terms of the research they have completed and their business model. &ldquo;For proprietary reasons I can&rsquo;t really get into specific factors that we look at, but we do a lot of research and are very selective in making our investments,&rdquo; he says.
The renewable fuels standard has also been a factor motivating Valero. Valero first got into the biofuels business because the company anticipated that demand for ethanol would be increasing. &ldquo;With the renewable fuels standard being in place, we saw a growing demand for ethanol,&rdquo; Day says.
Regarding the corn ethanol plants Valero purchased, Day notes that his company was able to improve the facilities and increase their efficiencies by increasing the output of the 10 plants by a total of 100 million gallons. &ldquo;Those plants have been profitable in every quarter since we brought them back in 2009,&rdquo; Day continues. &ldquo;That&rsquo;s something that we are proud of. We were able to take something that was kind of a questionable business model for some of the companies, and turn it into a profit center for Valero.&rdquo;
The refiner&rsquo;s first generation plants may also offer opportunity as the industry moves to second-generation technologies. &ldquo;With each of the plants that Valero bought out of the bankruptcy, one of the things that we liked&hellip;was that they are all relatively new,&rdquo; Day says. &ldquo;They have up-to-date technology, and they are on sites that allow for expansion. One of the things that we have looked at is that as cellulosic technologies become available, we could add those technologies as bolt on equipment to the existing corn ethanol plant&mdash;not to replace corn ethanol production with cellulosic [production], but to add it on and do it in conjunction.&rdquo;
While cellulosic biofuel technologies are still working to reach full commercial production, it is highly possible that Valero could add them to its existing ethanol plants in the future. When cellulosic technology is available and when it can be done on a large commercial scale, we&rsquo;ll have the sites already in place that that have the necessary infrastructure and already have the personnel, Day says. &ldquo;All of that will be ready to go.&rdquo; Impacts of Investment
Valero is poised to experience obvious benefits through its investments in advanced biofuels technologies. However, the companies the refiner partners with are also able to leverage a range of advantages that a traditional venture capital group might not be able to provide.
Terrabon is one such biorefining company that is benefitting from Valero&rsquo;s investment. The company is working to scale up a technology that ferments biomass feedstock&mdash;primarily municipal solid waste&mdash;into organic acids that can be further refined into chemicals and fuels. Terrabon has been operating a 150,000-gallon-per-year demonstration plant since 2009 and expects to have a 5 MMgy commercial plant operational by 2013.
According to Terrabon CEO Gary Luce, Valero signed on to invest in his company right after the first phase of its demonstration scale facility was up and running. At that time, Terrabon was focused on converting energy crops&mdash;sorghum&mdash;into biofuels, Luce says. &ldquo;What they wanted to do was take the organic acids that we were creating and actually create a fuel that they could test in their labs. That&rsquo;s what we did, and that&rsquo;s kind of where they came into the process.&rdquo;
Luce notes that Valero is slated to be an off-take partner for its future commercial-scale refinery. But, Luce points out that the company offers benefits far beyond the purchase of fuels. &ldquo;I think from a strategic standpoint, there is a different level of value they add,&rdquo; he says. &ldquo;One is just credibility. Those guys are smart, so it gives credence to our technology. They also have a big presence in the energy space, so as we are trying to figure out how to deploy our production into the market; what the mechanics of marketing are; and what the regulations and rules are that we need to make sure we have qualified through, they work with us on that.&rdquo; Luce stressed that Valero has worked with Terrabon to support a USDA loan guarantee and other government funding opportunities.
There are also technical advantages. &ldquo;They can take a look at our engineering designs and offer access to other market participants [such as] EPC firms or other types of vendors,&rdquo; Luce says. &ldquo;They make great introductions [to those parties].&rdquo; While venture capital funds are primary looking for strong returns on investment, strategic investors like Valero are also concerned with how an investment can impact their value chain, Luce says. For example, the fact that Valero has positioned itself through its investments to potentially off-take cellulosic and advanced biofuels will bring added benefits to the company beyond investment returns as the volume requirements of the RFS2 ramp up.
Luce also points out that having a strong industry investor like Valero onboard with your project can drastically improve your ability to finance a project. The industry now is evolving to a point for many, like us, Luce says, where technology really isn&rsquo;t an issue anymore; finding equity to build a plant isn&rsquo;t really an issue anymore. &ldquo;The real issue is how do you get debt on one of these plants,&rdquo; he says. &ldquo;One way that you try to credit enhance a project is with [feedstock supply and off-take agreements].&rdquo;
In addition, Luce says that as a true independent refiner, Valero offers a different perspective and different expectations than a global, vertically integrated &ldquo;Big Oil&rdquo; company. &ldquo;They are true independent refiners, so they really better understand, I think, their market costs and how they participate,&rdquo; Luce says. &ldquo;They have been a [strong] partner as we have moved along.&rdquo;
Valero has also invested in ZeaChem, which uses a specialized microorganism to convert biomass into a wide range of chemical and fuel molecules. The company is currently developing a 250,000 gallon per year demonstration plant, and is targeting to begin development of a 25 MMgy commercial-scale plant in 2012.
Valero made a strategic investment in the company during its Series B round of funding, which took place a couple of years ago. &ldquo;We found Valero is very, very helpful,&rdquo; says ZeaChem CEO Jim Imbler, noting that part of the relationship between the two companies will include an off-take agreement for fuel.
&ldquo;What has been great about Valero as a partner is they are extremely focused on first commercial,&rdquo; Imbler says. &ldquo;They want to see things get built that make money. They&rsquo;ve been a big help to us in a number of things; getting validation, getting engineering advice.&rdquo; Like Luce, Imbler stresses that venture capitalists are primarily focused on the exit, Valero is more concerned with the entrance. &ldquo;Your VCs are looking for how do we get the most money out of this investment,&rdquo; Imbler continues. &ldquo;About the time they are realizing what they want to do, Valero is just starting to get excited, because Valero wants to own operations. What you have with a strategic [investor] is generally a very long-term outlook, a very stable outlook, a very disciplined outlook, and somebody who can provide you with some good feedback.&rdquo;
&ldquo;I find that having those kinds of companies in our deal is very, very helpful,&rdquo; Imbler says. &ldquo;There are very rigorous, very disciplined, they are very execution oriented, all things that kind of fit our style, and they are also very focused on making molecules that make money. That&rsquo;s a good thing for people to focus on. I think sometimes in startups people can get to excited about the love for the science or the technology, but really at the end of the day, you better make something that somebody wants to buy and you better be able to do it for less than they want to pay for it.&rdquo;
Investments from strategic investors are obviously benefiting the biorefining sector, and Valero is showing no signs of slowing down. Day confirms his company is continuing to seek out new investment opportunities. &ldquo;We are looking all the time,&rdquo; he says. &ldquo;We evaluate many, many projects. We don&rsquo;t get involved in all of them that we look at, but we do evaluate a lot, and not only with our existing business lines, but we are also interested in whatever is coming next.&rdquo; Author: Erin Voegele Associate Editor, Biorefining Magazine (701) 540-6986 <a href="mailto:evoegele@bbiinternational.com">evoegele@bbiinternational.com</a>

Valero Energy Corp.'s investment in the advanced biofuels sector benefits startups and lends an increased aura of confidence to the industry

Betting on Biorefining 

Ford Motor Co. is working to increase the use of renewable materials in its vehicles. The carmaker recently announced it has teamed up with BASF to develop a caster oil-based foam product for use in the instrument panel of the 2012 Ford Focus. According to Ford, the castor oil blend is more durable, and minimizes component stretch to help optimize airbag deployment. The new foam also takes less time to produce, achieving higher manufacturing productivity.
&ldquo;Castor oil from plants helps deliver sustainable interior foam that reduces petroleum use while improving vehicle craftsmanship,&rdquo; says Bari Brown, Ford advanced product development engineer. &ldquo;It&rsquo;s beneficial both for the customer and Mother Nature.&rdquo; Over time, Ford plans to incorporate the castor oil-based foam into more products in its portfolio.
Ford also recently announced the introduction of new head restraint foam, in which 25 percent of the polyol is replaced with soy. The product was introduced in partnership with Lear Corp. According to Ford, 75 percent of its North American-built vehicles now feature biobased foam in the head restraints, while all Ford vehicles built in North America use biobased foam content in the seat cushions and backs.&nbsp;
&mdash;Erin Voegele

Vehicles get greener with biobased components

Renewable Cars

If you&rsquo;re worried about technology risk ruining a project&rsquo;s ability to receive financing, don&rsquo;t be&mdash;just get insured. That is what Mark Reidy, partner at Mintz Levin, and John May, managing director for Stern Brothers, would suggest anyway. The pair is working to develop an insurance package for advanced biofuels technologies that would help to mitigate the risk associated with novel technology. &ldquo;The general idea is that you pay a premium of something like 5 to 10 percent of the Capex (capital expense) costs associated with the technology alone, and then,&rdquo; May explains, &ldquo;in return, you get a performance warranty that would last from project finance close through 5 years.&rdquo; This would act in place of a technology wrap often given by an EPC contractor.
The idea, to mitigate risk stemming from technology that&rsquo;s never been utilized at a commercial scale, is actually nothing new. &ldquo;There are insurance companies out there that have already issued policy guaranteeing performance on technology for wind and solar,&rdquo; May says. &ldquo;The question is, can we push it to get technology risk insurance for advanced renewables?&rdquo;
That shouldn&rsquo;t be a problem because Reidy says the project finance super team has already pulled out roughly 50 of the most promising bioenergy-based companies that had applied to various U.S. DOE loan guarantee programs and were still on the waitlist, all to help them seek out insurance packages from companies like AIG and others. Why? Because some believe the loan guarantee and government-backed finance programs that have helped previous advanced bioenergy projects receive the necessary funding are coming to an end, mainly because the congressional super committee with plans to make huge deficit cuts doesn&rsquo;t bode well for government-based project finance renewal.
May&rsquo;s work with first-generation biofuels plants, and his innovative financing approach based on bond-financing led the team to seek out new insurance packages. &ldquo;Our focus is on project finance debt and on the indisputable truth that whoever the player is at the early stage,&rdquo; he says, whether it is a VC or a strategic investor, &ldquo;they are not going to do all equity forever. Project finance debt is an inevitable thing that has to be accomplished.&rdquo;
Given that truth, as May explains it, combined with what May learned from first-generation biofuels plants&mdash;that no project was high on the credit-quality scale&mdash;he and Reidy (and others on their team) set out to form the bond financing mechanism that was credit-enhanced by government loan guarantees. With the loss of those loan guarantees that essentially acted as credit enhancers to projects, May and crew needed to find an alternative to serve as a credit enhancer in the event that scheduled government dollars allocated to successful biorefining loan guarantee projects were nixed. &ldquo;The more tools we have in our toolbox to mitigate risk,&rdquo; May says, &ldquo;the better likelihood of actually getting a project financing done.&rdquo; And Mays has the proof to back up his stance on mitigating risk. &ldquo;The reality is there is hope,&rdquo; he says, because his team will be closing on an advanced biofuels project this year &ldquo;that is going to be done in a replicable fashion.&rdquo;&nbsp;
&mdash;Luke Geiver

Insurance packages could be the next tool to mitigate technology risk

Project Financing: the Insured Way

Determining how best to use a type of biomass material and in what application is sort of like figuring out which herb or spice is appropriate for a dish being cooked in the kitchen. This was the corollary that five undergraduates from the University of Illinois at Urbana-Champaign originally drew when they titled a proposal, &ldquo;The Engineering Spice Box,&rdquo; for a $5,000 grant given by BP to the university&rsquo;s Energy Biosciences Institute, an industry-university partnership sponsored by BP with UI and the University of California at Berkeley, to research engineering properties of biomass. The students wrote the grant to develop a virtual database that would explain to end users the properties of different types of energy crops such as sorghum, miscanthus, switchgrass, willow and energy cane, and their value for advanced biofuel, biochemical and other forms of energy production.
According to Luis Rodriquez, a professor at UI&rsquo;s agricultural and biological engineering department overseeing the student-run project, the grant is being used to examine the specific properties of biomass itself such as moisture, the breaking point of each crop (if the material is hard and brittle or elastic and flexible), the compressibility of each crop and the angle of repose (the angle at which the material falls naturally, which determines how much can be stored in a given area). The students have worked with BP for four years, previously focusing on developing drop-in advanced fuels from biomass. Rodriguez says the project has since shifted focus to broader upstream utilization of biomass.
&ldquo;Now, I think we&rsquo;re looking at a wider suite of uses such as biomaterials, and certainly biopower is a big one as well,&rdquo; Rodriguez tells Biorefining Magazine. &ldquo;It&rsquo;s that diversity that&rsquo;s really necessary to get these things off the ground, and the students working with me are very aware of that, and I think that&rsquo;s why they decided to take this challenge upon themselves&mdash;to try to enumerate these engineering properties of biomass.&rdquo;
Rodriguez adds that the students anticipate biomass properties will change, depending on the form the biomass is in, which will tell them how it could potentially be used in biorefining applications.
&ldquo;If they&rsquo;re successful, they should be able to distill a finite set of numbers describing the biomass with an understanding of those quantifiable values that we use to measure the biomass, one might be able to select from a number of preatreatment options whether it&rsquo;s a chemical decomposition of the cell well and so forth,&rdquo; Rodriguez says.
The research project will take approximately one year, and the funds will be used for research equipment and presentations. With the help of the BP grant, Rodriguez says the students will present their research in a display at a campus open house for the agricultural and biological engineering department.&nbsp;
&mdash;Bryan Sims

How a BP-sponsored grant will optimize biomass use

Studious by Nature

The only title missing from the member list for the United States Energy Security Council is a former U.S. President. The list is impressive and includes former Nobel Prize-winning scientists, U.S. Navy, Army, defense and agriculture secretaries, former senators, former major oil company executives and other familiar names such as Alan Greenspan, former chairman of the federal reserve, and Stephen Hadley, former national security advisor. Robert &ldquo;Bud&rdquo; McFarlane, former national security advisor during the Reagan administration, spoke with Biorefining Magazine about what all the big names add up to.
The simple answer is something we&rsquo;ve all heard before: the USESC is concerned about the nation&rsquo;s dependence on foreign oil, McFarlane explains. But that simple answer is more complex than many think. &ldquo;Because that single fuel moves roughly 97 percent of all air, sea and land transportation, it is really the foundation&mdash;the lynch pin of our entire economy,&rdquo; McFarlane says. The economic risk of purchasing so much foreign oil not only makes us vulnerable &ldquo;to the whims&rdquo; of OPEC countries, but it also displaces an enormous amount of money away from the U.S. That oil money, he says, &ldquo;is recycled back to purchase American companies and influence over the American government.&rdquo;
But as bad as that sounds, there is good news. &ldquo;Unlike 40 years ago when we faced this thing, today you really could introduce alternative fuels,&rdquo; he says. And that, McFarlane adds, is exactly why the USESC formed. &ldquo;It is a matter of getting these alternatives to be viable options, not in terms of technology, but in terms of infrastructure and production levels,&rdquo; adding that when he goes to hedge funds or investors and urges them to invest in these things, he gets the same answer. &ldquo;They say, Bud, we get it&mdash;they are all proven.&rdquo;
To do their part in supporting alternative fuels and achieve their goals of influencing Congress to do the same thing, McFarlane and the other members are tapping into mainstream media (The New York Times or The Wall Street Journal) by writing op-ed pieces, doing interviews with magazines such as Biorefining Magazine, or he says, by reaching out to the networks the members are already connected to. Like the list of member names, that network list is impressive. As McFarlane explains, those networks include academic circles at Stanford University, the science and technology community linked to Lockheed Martin, or through John Hofmeister, former President of Shell Oil North America. &ldquo;Wow,&rdquo; McFarlane says, &ldquo;there is somebody that will get attention when the industry that is most opposed to competition is standing up and saying we have to do this.&rdquo;&nbsp; We agree, Bud.&nbsp;
&mdash;Luke Geiver

USESC urges support for alternative fuels, stronger infrastructure 

Powerful Names Unite

Like John D. Rockefeller accomplished with the creation of Standard Oil, California-based algae technology developer OriginOil Inc. believes that specification standards are necessary for the burgeoning algae industry. To make this a reality, the company is working with the U.S. DOE&rsquo;s Idaho National Laboratory to develop standards for converting biomass, including algae, in an effort to provide direction for designing equipment and products to meet this standard.
Working with the Pacific Northwest National Laboratory and National Renewable Energy Laboratory as part of the U.S. DOE&rsquo;s Biomass Program, OriginOil&rsquo;s collaboration with INL will focus on utilizing a process demonstration unit at INL to determine how algae could add energy content in combination with other feedstocks such as woody biomass and other herbaceous materials that are currently used in various biochemical and thermochemical processes. While the original focus of the program was on terrestrial biomass, OriginOil plans to work with researchers at INL to extend the concepts to include algae, according to Paul Reep, OriginOil&rsquo;s vice president of technology intimately involved in the collaboration.
Reep says he envisions that once a correct formulation is established, the combined functional groups and net-energy value of the entire formatted feedstock comprised with portions of algae material will be greater than the sum of the individual parts.
&ldquo;The big-picture idea behind this program is to set up a series of depots around the country where different types of materials that are more indigenous to one specific area could be combined with other indigenous materials from another area, and create uniform feedstocks that could then be shipped and transported to biorefineries,&rdquo; Reep says. &ldquo;It&rsquo;s these depots that are the intermediate step in that going-to-the-biorefinery process.&rdquo;&nbsp;
&mdash;Bryan Sims

Establishing a uniform intermediate feedstock standard for algae

Upstream Standardization 

Inbicon A/S, a Danish cellulosic ethanol technology developer, has signed an agreement with Metso Paper Sweden AB. Under the agreement, Metso will supply equipment for Inbicon&rsquo;s biorefinery technology. The two companies will cooperate in designing and supplying full-scale industrial equipment by combing Metso&rsquo;s fiber processing technology with Inbicon&rsquo;s cellulosic ethanol technology.
Inbicon CEO Benny Mai notes that the agreement is important to his company and its future plans. &ldquo;We have worked closely with Metso for some time now, which started with common testing of their equipment with our technology,&rdquo; he says. &ldquo;Further we are convinced that we both, with this agreement, have taken the final step in up-scaling the technology enabling bioethanol producers to build second-generation bioethanol refineries. We are now ready to deliver the process technology and Metso the equipment to commercial-size refineries for second-generation bioethanol.&rdquo;&nbsp;
&mdash;Erin Voegele

Inbicon, Metso to mesh technologies, design second-gen equipment 

Equipping the Cellulosic Future

Royal Dutch Shell recently tested the impact of Virent Energy Systems Inc.&rsquo;s biobased gasoline on vehicle engines. The results of the evaluation show that the renewable fuel caused &ldquo;no harm&rdquo; to vehicles when compared to conventional gasoline. To complete the road trials, Shell used five identical pairs of vehicles. One vehicle in each pair was fueled with petroleum gasoline; the other was fueled with a mix of petroleum gasoline and Virent&rsquo;s biobased fuel. Each car was then driven approximately 6,000 miles. At the end of trial the engines of all 10 cars were dismantled and inspected. Regardless of the fuel used, all engines were found to be in the same condition.
Aaron Imrie, Virent&rsquo;s commercial manager of fuels, says that the successful completion of the trial is an important achievement for this company. &ldquo;We had a lot of confidence that we would be successful in completing this first road trial,&rdquo; he adds, noting that Virent&rsquo;s renewable gasoline is a drop-in biofuel that is nearly identical to fossil gasoline on a molecular level. According to Imrie, the trial demonstrated that Virent&rsquo;s renewable gasoline essentially performs identically to conventional gasoline. &ldquo;That is exactly what we were hoping to see,&rdquo; he says.
Additional testing will need to be completed to certify Virent&rsquo;s fuel for deployment in the U.S. That testing will be done through engagement with the U.S. EPA. &ldquo;We&rsquo;ve started those discussions,&rdquo; Imrie says. &ldquo;There is a fairly lengthy process for getting a new fuel approved in the U.S. At this point we&rsquo;re ready to do what the EPA calls Tier 1 testing. That is similar to the fleet trials in the U.K&hellip;and it focuses primarily on the exhaust emissions as well as the evaporative emissions.&rdquo;&nbsp;
&mdash;Erin Voegele

Virent's renewable gasoline successfully completes road trial

A Positive Evaluation 

Marginal lands are not necessarily areas where it is difficult to grow crops. Shibu Jose, a professor at the University of Missouri and director of the university&rsquo;s Center for Agroforestry, estimates there is nearly 116 million acres of marginal land along corridors of the Mississippi and Missouri Rivers. &ldquo;We do have perhaps the nation&rsquo;s most productive agricultural land in this corridor, but the flood plain also has some of the most sensitive land in the country,&rdquo; Jose says. &ldquo;We call it a flood plain for a reason. They get flooded frequently. The land is marginal in the sense that it is frequently flooded and has a high potential for erosion when you do row cropping.&rdquo;
Owners of these lands generally plant row crops, such as corn or soybeans. This means the soil is disturbed at least once a year. In the event of a flood, soil from the disturbed land is more easily eroded, impacting the quality of the land and river water. Jose is proposing that this vulnerable land be used to produce biomass feedstocks, such as switchgrass, miscanthus, cottonwood or willow. He says the cultivation of these crops is less risky, as the land rarely has to be disturbed for replanting. The biomass crops are also much more tolerant of flooding conditions than traditional row crops, which means that the farming community will be less vulnerable to losing their crops.
Jose is currently working to establish a consortium of stakeholders along the corridor. He is working to get the entire supply chain involved, from land owners producing the biomass, to the refiners who are processing that biomass into fuel, and the consumers who use it. &ldquo;When we looked at this region, we could not find a lot of effort [being put] into bringing key players to the table to talk about issues related to the biobased economy,&rdquo; Jose says. &ldquo;If we can work together, we can make this bioeconomy happen faster.&rdquo;&nbsp;
&mdash;Erin Voegele

Professor formulates plan using flood plains for biomass production

A Soggy Solution 

Lanxess is strengthening its commitment to produce premium synthetic rubbers from biobased inputs. The German specialty chemical company aims to produce ethylene-propylene-diene monomer (EPDM) from biobased ethylene by the end of the year, which would make it the first form of biomased EPDM rubber in the world.
Traditionally, EPDM is produced using petroleum-based raw materials such as ethylene and propylene. Alternatively, Lanxess plans to use ethylene derived from sugarcane. This biobased form of ethylene is produced by dehydrating ethanol from sugarcane. Brazilian petrochemical company Braskem SA will supply Lanxess the biobased ethylene via pipeline from its 200,000-ton-per-year ethanol plant in Triunfo, Brazil, to Lanxess&rsquo; existing EPDM production facility also located in Triunfo. &ldquo;Lanxess&rsquo; ongoing search for alternatives to fossil fuels underlines its commitment to reducing carbon dioxide emissions through sustainable production,&rdquo; says Guenther Weymans, head of Lanxess&rsquo; technical rubber products business unit. &ldquo;We are very excited that our Brazilian plant will be the pioneer for biobased EPDM.&rdquo;
Lanxess&rsquo; facility in Triunfo produces 40,000 metric tons of regular petroleum-based EPDM rubber annually and it&rsquo;s expected that the company&rsquo;s first batches of biobased EPDM will amount to several hundred metric tons. The company&rsquo;s other EPDM production sites are based in Geleen, Netherlands; Marl, Germany; and Orange, Texas. According to Lanxess, all of its EPDM grades will be sold in the future under the brand name Keltan with its biobased grades marketed under the brand name Keltan Eco.
&ldquo;Lanxess will contribute to broaden its portfolio of renewable chemicals&rsquo; clients,&rdquo; says Marcelo Nunes, Braskem&rsquo;s renewable chemicals director. &ldquo;This agreement will bring the benefits of green ethylene to other important applications and markets. Lanxess has extensive automotive experience and an excellent reputation in this market, which makes it an ideal partner.&rdquo; Although used predominantly for rubber-based components in the automotive industry, EPDM is also used in the plastics modification, cable and wire, construction and oil additives industries. Its beneficial properties include low density, a resistance to heat, oxidation, chemicals and weathering as well as solid electrical insulation properties.
In addition to including biobased forms of EPDM, Lanxess intends to use renewable sources for the production of butyl rubber, a material predominantly used in the tire industry. Together with Colorado-based Gevo Inc., Lanxess is developing isobutene, a key raw material needed in the manufacture of butyl rubber, derived from Gevo&rsquo;s corn-based isobutanol.&nbsp;
&mdash;Bryan Sims

Specialty chemical firm to introduce world's first biobased EPDM rubber

First to Market

1. Mannheim, Germany-based specialty chemical company Rhein Chemie Rheinau GmbH has been presented with the 2011 Frost &amp; Sullivan Global New Product Innovation Award in the Bioplastic Additives Market for its BioAdimide product. BioAdimide is an additive that has been specifically formulated for use with bioplastics. The product enhances the durability of polylactic acid (PLA) plastic, and makes the material more amenable to processing. Rhein Chemie first announced the availability of its BioAdimide additive line of biobased polyesters in March. According to the company, BioAdimide additives are designed to improve the hydrolysis resistance of biobased polyester in general, and PLA specifically. The additive expands the range of applications PLA can be used for. Two grades of BioAdimide are currently available: BioAdimide 100 improves the hydrolytic stability up to seven times that of an unstabilized grade, which helps to increase the service life of the polymer. BioAdimide 500 XT also provides hydrolytic stability, but also acts as a chain extender that can increase the melt viscosity of an extruded PLA by 20 to 30 percent when compared to an unstabilized grade. This allows for more consistent and easier processing. 2. A report produced by the National Research Council at the request of Congress claims the U.S. is likely to be unable to meet some specific biofuel mandates under RFS2, the federal renewable fuel standard, unless polices are changed or new innovative technologies are developed. The report further states that the program may be ineffective at reducing global greenhouse gas emissions and that achieving the standards established by RFS2 would likely increase federal budget outlays and have mixed economic and environmental effects. Those in the biofuels industry have spoken out questioning various aspects of the analysis. The authors note the industry is expected to produce enough conventional biofuels and biomass-based diesel to meet targets, but claim there is uncertainty over how the cellulosic mandate will be met. The report also points out uncertainties related to greenhouse gas reductions. The report states dedicated energy crops will be needed to meet the RFS2 targets; however, their cultivation will probably require the conversion of uncultivated land or the displacement of commodity crops and pastures. The authors also point out that the RFS2 program can neither prevent market-mediated efforts nor control land use or land-cover changes in other countries. In addition, the report notes that biofuels face challenges related to price competitiveness, and that RFS2 will lead to government spending in relation to grants, loans, loan guarantees, and other payments to support biofuel production. The authors also claim that the specific environmental outcomes from increased biofuels production cannot be guaranteed. 3. Bioplastics manufacturer NatureWorks LLC has announced that Thailand&rsquo;s largest chemical producer, PTT Chemical Public Co. Ltd., is investing $150 million in NatureWorks, which until now has been wholly owned by Cargill. The deal is subject to regulatory approval. Once granted, PTT Chemical will hold a 50-percent equity share in NatureWorks. The investment means that NatureWorks&rsquo; second manufacturing facility will be built in Thailand, and is projected to be operational by late 2015. The company currently operates a 150,000-ton-per-year bioplastics manufacturing facility in Blair, Neb. The Nebraska plant actually consists of two adjacent facilities; one that produces biobased lactic acid and a second that converts that biobased feedstock into NatureWorks&rsquo; Ingeo bioplastic. NatureWorks will need to determine if the company can purchase sufficient quantities of biobased lactic acid on the market, or if it will need to establish a lactic acid plant in addition to the Ingeo facility. If a lactic acid plant must be built, it will also need to be decided whether NatureWorks, Cargill or PTT Chemical would construct and operate the plant. The new facility is expected to produce approximately 150,000 tons of Ingeo bioplastic a year. 4. Toyota Motor Corp. recently held an event at its Toyota Biotechnology and Afforestation Laboratory to showcase technologies it has developed as part of its biotechnology and afforestation business. A newly developed yeast strain that increases the production yield of cellulosic ethanol was one of the technologies on display at the event. According to information released by Toyota, its researchers used gene recombination technology to develop a new strain of yeast for cellulosic ethanol production. The new yeast is highly efficient at fermenting xylose, and is also highly resistant to fermentation-inhibiting substances such as acetic acid. &ldquo;As a result, the yeast has achieved one of the highest ethanol fermentation density levels in the world (approximately 47 grams per liter), and is expected to improve biofuel yield and significantly reduce production costs,&rdquo; said Toyota in a statement. It also stated that research is currently underway to develop comprehensive technologies for the various processes involved in cellulosic ethanol production, including raw material pretreatment, enzymatic saccharification and yeast fermentation. Toyota says it is striving to achieve a stable supply of feedstock as well as technologies that reduce production costs.
5. Arizona-based algae technology developer Heliae Inc. has announced the signing of a memorandum of understanding to produce algae-derived jet fuel for SkyNRG, an Amsterdam-based educator and marketer that focuses on the jet aviation industry. Heliae was established in 2008 when it partnered with Arizona State University to begin efforts to develop algae strains capable of producing high quantities of lipids. A pilot facility was established on ASU&rsquo;s campus in 2008 and 2009. In 2010, the company established its headquarters in Gilbert, Ariz., where it recently constructed a demonstration-scale facility. The demo plant will be capable of producing more than 100 tons of algae biomass per year. The company is developing algae strains, bioreactor designs and extraction technologies, and will look to develop partnerships with entities that have technology to convert algae biomass into jet fuel. The company ultimately intends to license its technology to third parties, but will be scaling up to the next level internally. 6. California-based BioSolar Inc. has announced that a significant number of Asian solar companies have received samples of its biobased backsheet and are actively evaluating the possibility of utilizing BioSolar&rsquo;s product in the manufacture of their solar panels. BioSolar&rsquo;s BioBacksheet is designed for use in photovoltaic (PV) solar modules.The product is manufactured using a polyamide made from renewable feedstocks. Castor beans are a primary ingredient in the product. It also contains mineral components. The finished biobased backsheet product has achieved certification under the USDA&rsquo;s BioPreferred Program. In mid-2011, BioSolar announced that it had entered into a sales representative agreement with ShinHa Inc., a Korean firm representing large Asian PV panel manufacturers targeting the U.S. market. According to BioSolar, that announcement helped drive interest in BioBacksheet. The company expects to receive a provisional relative thermal index for its product from Underwriters Laboratories Inc. later this month. That rating is needed in order for PV manufacturers to replace their current petroleum-based backsheets with BioBacksheet. BioSolar currently uses a contract manufacturer to produce batches of its BioBacksheet product.&nbsp; 7. The U.S. DOE finalized a $132.4 million loan guarantee to Abengoa Bioenergy Biomass of Kansas LLC to support development of a commercial-scale cellulosic ethanol plant. ABBK&rsquo;s parent company and project sponsor, Abengoa Bioenergy US Holding, Inc., estimates the project will fund approximately 300 construction and 65 permanent jobs. The project will be located in Hugoton, Kan., about 90 miles southwest of Dodge City. The facility is expected to convert approximately 300,000 tons of agricultural crop residues, including corn stover, into approximately 23 million gallons of ethanol per year using an innovative enzymatic hydrolysis process. The project is expected to displace more than 15.5 million gallons of gasoline, which will avoid 139,000-plus tons of carbon dioxide emissions, and it will be self-sufficient, using unconverted biomass to generate 20 megawatts of electricity to power the cellulosic ethanol plant.&nbsp; ABBK expects more than 90 percent of the project&rsquo;s sourced components to be produced in the U.S. 8. The Advanced Research Projects Agency-Energy has awarded $36 million to PETRO-based projects, but the awards have little to do with fossil-based oil. The projects, housed under what the ARPA-E has labeled Plants Engineered to Replace Oil, are projects aimed at &ldquo;dramatically improving how the U.S. uses and produces energy,&rdquo; according to the agency. In total, 10 projects under the PETRO category received funding. For the full list of project&rsquo;s awarded ARPA-E funding visit www.arpa-e.energy.gov. 9. Redwood City, Calif.-based biotech outfit Codexis Inc. and Raizen Energia S.A., a joint venture between Royal Dutch Shell and Brazilian ethanol giant Cosan, have signed a joint development agreement to develop an improved first-gen ethanol process with potential of expanding the collaboration to include the production of biobased chemicals. As part of the agreement, the two firms will deploy Codexis&rsquo; trademarked CodeEvolver directed evolution technology platform to improve Raizen&rsquo;s current ethanol production process from sugarcane-derived sugar. The agreement will focus on a range of targets, including improving the performance of yeasts now used in ethanol production. Both companies anticipate pilot production to launch at Raizen&rsquo;s Bonfim mill. Codexis will retain commercialization rights and Raizen will receive preferential commercial terms. Codexis said in a statement that the collaboration may potentially expand into the development of biobased chemicals but the company responded to Biorefining Magazine in email correspondence stating the firm couldn&rsquo;t disclose specifically which biochemicals they might be at this point. In July, Codexis teamed with Chemtex, a global technology and engineering company wholly-owned by Italy&rsquo;s Gruppo Mossi &amp; Ghisolfi, to jointly develop and produce biobased detergent alcohols&mdash;a $6 billion global market&mdash;to be used in a variety of consumer products such as surfactants, laundry detergents, shampoos and other consumer products. The collaboration includes development of second-gen detergent alcohols derived from cellulosic biomass.
&nbsp;
Share your industry briefs: To be included in Business Briefs, send information (including photos and logos if available) to: Industry Briefs, Biorefining, 308 Second Ave. N., Suite 304, Grand Forks, ND 58203. You may also fax information to (701) 746-8385, or e-mail it to <a href="mailto:rkotrba@bbiinternational.com">rkotrba@bbiinternational.com</a>. Please include your name and telephone number in all correspondence.

Biofuel refineries have a good working understanding of the steps needed to avoid workplace accidents and damage to the refinery infrastructure. The insurance to cover these claims is also well understood. Workers&rsquo; compensation insurance covers injuries to employees; liability policies cover injuries to visitors, contractors, and third parties who are injured while at the facility; and property casualty insurance and business interruption insurance covers damage to the facility. But what about the risks posed by the transportation of goods both to and from the site? Some of these risks arise from transporting products and other risks arise from the products themselves. In either case, these risks may be excluded by many of the standard policies.
The transportation of biofuels usually requires the use of train cars or trucks. Liability can arise if a carrier&rsquo;s vehicles are damaged on the facility grounds. As an example, poor road conditions and unclear signage can contribute to accidents on the facility. Releases of sulfuric acid and methanol (used to refine biofuels) can escalate the size and complexity of the claim. The facility&rsquo;s management should make sure that it has adequate insurance. Standard property casualty policies may not cover damage to trucks and trains owned by third parties because that property is not owned, controlled or leased by the facility.&nbsp;
Standard liability policies frequently exclude incidents involving train derailments or collisions. If the facility owns railroad tank cars, then management should check to make sure that there is insurance in place to cover not only the cost of repair but also any liability or demurrage claims that may arise if an injury or derailment is caused by a defect in the tank car. If coverage for damages to or caused by railroad trains is excluded, then the company should buy a special endorsement or policy.&nbsp;
Transportation of finished biofuels and byproducts can also pose a liability risk. This risk is greatly reduced if the product is being carried by a common carrier&rsquo;s equipment. Generally, the common carrier will be liable for accidents involving its own equipment and drivers. However, depending on the tariff or contract, the shipper may have a duty to secure the load properly. If the facility owns the trailer or tank car, then any equipment problem that contributes to an accident or release of product can also generate secondary liability, even if it is being transported by a common carrier.
If product is released during transport, there are possible civil, administrative, and criminal penalties that can be assessed by state and federal agencies if the release can be traced back to a failure of the refinery to properly load and secure the product. For releases that are large enough to require removal and remediation, then there may also be liability to state and federal agencies that respond and third parties whose property may be affected. Standard policies may specifically exclude any claims arising from the release of a &ldquo;pollutant.&rdquo; Finding environmental insurance that will cover those claims can be very challenging. Lower tier environmental insurance policies contain so many exclusions that they are nearly worthless. There is also no point in buying an environmental insurance policy if it excludes releases that take place during transport or cleanup costs. It is hard to believe that an environmental policy would exclude emergency response and removal costs, but they are out there.
The story does not end with the identification of an insurance policy that appears to cover a given claim. There is an old adage that insurance companies are in the business of collecting premiums and not paying claims. If the claim is small, insurance companies reject the claim knowing that the cost of litigation for the insured to recover on the claim will consume any recovery. If the claim is large, they reject the claim knowing that when faced with the prospect of costly and drawn-out litigation the insured may capitulate and take less than the full value of the coverage. In either case, the refinery may have to go to court in order to get the coverage that it has paid for. Author: James Pray Attorney, BrownWinick (515) 242-2404 <a href="mailto:pray@brownwinick.com">pray@brownwinick.com</a>

Legal considerations in moving product   

Liability, Insurance Issues in Biofuel Transportation

Does your plant&rsquo;s depreciation record accurately reflect your facility&rsquo;s equipment? For most biorefineries, the answer is a resounding &ldquo;no.&rdquo; Many plants don&rsquo;t have their fixed assets properly identified, tagged and matched in company books and accounting systems. Often the plant&rsquo;s equipment has been entered into the books in groups such as &ldquo;tank farm&rdquo; or &ldquo;process equipment&rdquo; instead of specifying each piece separately. Pieces of equipment have been pulled out of service, sold or otherwise disposed and new assets have been added without being recorded, and there is no list of equipment that matches labeled equipment actually in the plant. The result is that when any outside source tours the plant, any inventory or inspection consists of a series of explanations by the plant management about why new equipment is present or old equipment is absent. A well-managed plant has each piece of equipment listed separately (including year of manufacture, make, model, serial number and date placed in service), and each entry is matched to a permanently tagged piece of equipment in the plant.&nbsp;&nbsp;
Typical plant equipment that is included in a fixed asset audit includes all process and support equipment such as boilers, air compressors and lab equipment; all office support equipment including furniture and computers; and all inventory. Whether a plant&rsquo;s equipment was not documented accurately to begin with or assets were disposed of without updating the books or new assets were added, a fixed asset audit and continuing asset management is a good way to clean house. It speaks volumes about a plant when an appraiser, investor, buyer or tax official can walk through a plant without the owner and see each piece of equipment tagged and matched to a fully informational, corresponding entry in the books.
While managing fixed asset records might not seem like a high priority, the truth is that a comprehensive and current fixed asset inventory appraisal assists plants in many ways. It makes financial reporting and capital expenditure planning easier and much more accurate. The audit can help clean up the books with a clear, updated description of the asset. This involves both plant management and the plant&rsquo;s accounting personnel. A detailed listing all of all assets, their location, description, condition and age, must be developed. Groups of assets must be broken out as to individual costs and updated values placed on individual assets. Each piece of equipment must be properly tagged and must match a corresponding entry in the books. Finally, a fixed asset management system should be put in place so that when equipment is added or removed, the system can be easily updated.
While these fixed asset audits can be done any time, they are quite often done in conjunction with an appraisal since the professional is already on site. That said, two things should be noted. First, every plant should have asset management in place, whether an audit is in its future or not. Second, not all appraisers perform asset management audits, so be sure to check when doing an appraisal.
The time and expense of such an audit pays for itself in many ways. Clean fixed asset records that accurately describe, and are easily matched to pieces of equipment in the plant, bring several benefits. They&nbsp; help lower property taxes, insurance costs and claims; improve financial planning and capital budgeting; reduce expenses on future appraisals and audits as less time is needed to identify and research equipment; and insure accurate accounting and help in establishing higher values when selling or seeking investment.
The longer a plant goes without performing such an audit, the greater disconnect between the records and the actual plant equipment. This results in a greater potential for higher taxes or insurance premiums, and a much more difficult budgeting, sale or investment process.
At Lee Enterprises Consulting, plant appraisals are commonplace services. Our appraiser does appraisals for owners trying to raise capital or preparing for sale, lenders or investors trying to determine the value of their proposed collateral, in matters where ownership is changing, or even where the plant is involved in legal matters such as foreclosures and bankruptcies. Regardless of the reason hired, the appraisers find certain common trends. One of those is that well-managed and well-kept plants are usually worth more. To some, this fixed asset management is akin to keeping the plant clean. Not only does it save money, but it separates the well-managed from the average.&nbsp; &nbsp;&nbsp;&nbsp;&nbsp; Authors: Wayne Lee, Catherine J. Rein CEO; Appraiser, Lee Enterprises Consulting <a href="mailto:Wlee52@lee-enterprises.com">Wlee52@lee-enterprises.com</a> <a href="mailto:cathy@lee-enterprises.com">cathy@lee-enterprises.com</a>

The many benefits of accurate, detailed books

Plant Appraisals and Fixed Asset Management 

1/16. If you go to one event in the western U.S. in 2012, make it BBI International&rsquo;s Pacific West Biomass Conference &amp; Trade Show, produced jointly by Biomass Power &amp; Thermal and Biorefining magazines.
The Pacific West Biomass Conference &amp; Trade Show, which heads to the Bay area this year, will be held Jan. 16-18 at the San Francisco Marriot Marquis.
The conference, one of three distinct regional offshoots of BBI&rsquo;s International Biomass Conference &amp; Expo, will feature more than 60 speakers in four tracks: -&nbsp;&nbsp;&nbsp; Biomass power and thermal -&nbsp;&nbsp;&nbsp; Feedstocks -&nbsp;&nbsp;&nbsp; Biomass project development and finance -&nbsp;&nbsp;&nbsp; Biorefining The Pacific West Biomass Conference &amp; Trade Show will connect the area&rsquo;s current and future producers of biomass-derived electricity, industrial heat and power, and advanced biofuels, with: -&nbsp;&nbsp;&nbsp; Waste generators -&nbsp;&nbsp;&nbsp; Aggregators -&nbsp;&nbsp;&nbsp; Growers -&nbsp;&nbsp;&nbsp; Municipal leaders -&nbsp;&nbsp;&nbsp; Utility executives -&nbsp;&nbsp;&nbsp; Technology providers -&nbsp;&nbsp;&nbsp; Equipment manufacturers -&nbsp;&nbsp;&nbsp; Investors -&nbsp;&nbsp;&nbsp; Policymakers
The Pacific West Biomass Conference &amp; Trade Show is designed to help you, the biomass industry stakeholder, identify and evaluate solutions that fit your operation.
It&rsquo;s time to improve your operational efficiencies and tap into the revenue-generating potential of sustainable biomass resources in the region.
Register today at http://pacificwest.biomassconference.com.

Biomass Event Hotspot:San Francisco in January 

Over the past year I&rsquo;ve found myself appreciating more the popular quip by President Reagan when he said the &ldquo;most terrifying words in the English language&rdquo; are &ldquo;I&rsquo;m from the government, and I&rsquo;m here to help.&rdquo; Well, that &ldquo;help&rdquo; was offered up to Congress recently when the National Research Council, an arm of the National Academy of Science, delivered a report proclaiming advanced biofuels won&rsquo;t reach the 16 billion gallon requirement for cellulosic biofuels called for under the renewable fuel standard (RFS2). That&rsquo;s the kind of help America&rsquo;s domestic biofuels industry does not need, particularly now as companies are itching to commercialize while Washington is wielding its budget axe.
The report concluded that without significant subsidies or, alternatively, high oil prices or a carbon standard, advanced biofuels made from cellulosic material would be unlikely to fulfill its mandated gallon target under RFS2. After carefully reading through the complete report, I can tell you that boat won&rsquo;t float.
Of its numerous flaws, the fatal mistake comes with the report&rsquo;s assumption that the technologies it analyzes have reached their maximum potential and won&rsquo;t&mdash;as we&rsquo;re actually seeing in the real world&mdash;continue to advance at a rapid rate. The report leaves the overall impression that all the various potential pathways are at the same development space in time and doomed to be noncompetitive over the near term. It makes very little, if any, distinction between the various feedstock and technology platforms. Have you heard of Moore&rsquo;s law?
The report focused on three particular advanced biofuels pathways:&nbsp; gasification, fast pyrolysis and cellulosic ethanol. Personally, since the Advanced Biofuels Association represents a number of cellulosic technologies that have decided making jet fuel, renewable diesel, or gasoline is a smarter bet, I question why the continued focus on simply one molecule: ethanol? As for pyrolysis, I have personally visited two demonstration facilities in the past year and a half, and I can report they are moving ahead quickly and making significant R&amp;D and technological advancement at a rapid rate.&nbsp;
Following the release of the report, Professor Robert Brown of Iowa State University made a significant observation that&rsquo;s also worth mentioning here. He wrote, &ldquo;For reasons not clearly justified, data from the ISU studies related to the capital cost of pyrolysis technology, one of the most promising approaches to advanced biofuels was inflated to levels that erased the projected profitability of this technology.&rdquo;
While the 400-page report was required, it took a great deal of time to assemble; and by the time it was published, I would argue the report has sections that are already behind the development curves they were evaluating.&nbsp; This is a snapshot in time and should not become the gospel to be referred to over the next four or five years, like some opponents of biofuels will attempt to do.
The bottom line is we are now in an environment in Washington where a number of lawmakers on Capitol Hill are either directly trying to remove any form of government support for advanced renewable energy technologies broadly, with some specifically aiming at biofuels. Take, for instance, Rep. Bob Goodlatte of Virginia who recently introduced legislation to repeal RFS2. Still there are others, many of whom are not fully aware of the promise and success of our industry, pulling back as the Solyndra solar company debacle has given anxious lawmakers reason to go dark for a while on all topics related to government support of advanced biofuels.
One redeeming aspect of the report is the recognition of the need for a stable policy platform at the federal level if we are truly to deploy these advanced biofuels technologies. It simply sends an extremely confusing message to those considering investing in the sector to have the supporting tax provision expiring on a year-to-year basis. Additionally, it is confusing to have multiple loan guarantee programs that expire or have different terms of engagement between the parties, or are run by multiple agencies. Clearly, with the current commercial lending environment a strong consistent federal policy over a reasonable period of time would be more supportive than the existing array of various support mechanisms found in the federal policy books.
Understandably, the world isn&rsquo;t waiting for America to get its house in order. This is all occurring while other nations around the world, specifically China, are doubling down on their bets in the advanced renewable energy space by investing a significant portion of the GDP to lead the race in developing advanced biofuels and other clean energy technologies.&nbsp; Developing and deploying innovative and paradigm-shifting technology such as advanced biofuels takes vision, time and investment. It is far too early in the game to denounce the pace or efforts in this space. It offers too great an opportunity for creating economic and energy security while moving in a more sustainable direction. Washington, next time you seek to promote advanced biofuels, lend a hand that pulls us forward&mdash;not one that pushes our heads down. Author: Michael McAdams President, Advanced Biofuels Association (202) 469-5140 <a href="mailto:Michael.McAdams@hklaw.com">Michael.McAdams@hklaw.com</a>

Flawed RFS2 report may send inaccurate assumptions to policymakers

Wrong Message, Wrong Time

It is easy to vilify the petrochemical companies as profit-hungry despots that embody everything advanced renewable fuels and biobased chemicals stand against. They spend untold amounts of money to locate biomass with an extremely long life cycle, crude oil, far underground or beneath the sea, and drill, baby, drill. In a perfect world, fracking fluids would not compromise pristine soils; there would be no explosions miles offshore that kill humans, pollute our waters, cause slow, agonizing death for wildlife, and destroy countless communities.
But, obviously, we don&rsquo;t live in a perfect world. And despite the seemingly antagonistic relationship between Big Oil and the biorefining community, perhaps no sector is moving advanced biofuel and biobased chemical development faster and further than the oil industry. As John Huber, head of the National Oilheat Research Alliance, said during the Bioheat Northeast Workshop in Pittsburgh last month, as time progresses, extracting these hydrocarbons from the ground becomes harder and harder&mdash;and more expensive&mdash;thus, the oil companies must diversify their portfolios if they intend to sustain. Likewise, many biorefining startups have found that Big Oil&rsquo;s deep pockets, technical mastery, engineering experience and logistical prowess are essential to their survival and prosperity. To exemplify this, look at Houston, Big Oil Central. The city is also home to the most densely populated conglomeration of biorefining startups&mdash;and it&rsquo;s not by coincidence.
Oil has given us a model to follow for what an efficient, profitable refinery should be. A refinery takes in crude oil and puts out numerous energy products. Scale this model down, decentralize it and substitute in biomass with a much shorter life cycle than crude oil, and what you have is the quintessential biorefinery. There is no better way to leverage a century-and-a-half&rsquo;s worth of oil industry experiences, bad and good, than funneling it into tomorrow&rsquo;s more responsible energy paradigm.
Author: Ron Kotrba Editor, Biorefining Magazine <a href="mailto:rkotrba@bbiinternational.com">rkotrba@bbiinternational.com</a>

February 2012

Business Briefs

Business Briefs

Busines Briefs

Business Briefs

Columns

The ILUC Debate, Four Years Later

The Power of Pride and Passion

Effective Outreach

A Pragmatic Approach to Fuel Taxation

Reaping the Benefits of a Strong Biofuels Industry

The Ethanol IP Evolution

Ethanol's Octane Provides Proactive Opportunity

Good News for Forest Biomass

Biomass Confusion at the EPA

Speaking for Heat, Accent and All

Update on a Mobile Indirect Biomass Liquefaction System

Understanding Further Revised US EPA Boiler Standards

Liability, Insurance Issues in Biofuel Transportation

Plant Appraisals and Fixed Asset Management

Wrong Message, Wrong Time

Big Oil

Featured

Golden Possibilities

Certifying Sustainability

Pieces of the Puzzle

Revitalizing Rubbertown

Combined Calefaction

Words from the Wise

Synergy by Design

The BP Biofuels Story

Betting on Biorefining

February 2012.css-7jxktu{position:absolute;bottom:0px;left:0px;right:0px;height:3px;border-radius:3px;background-color:var(--chakra-colors-brandBlack);}

Business Briefs

Business Briefs

Busines Briefs

Business Briefs

Columns

The ILUC Debate, Four Years Later

The Power of Pride and Passion

Effective Outreach

A Pragmatic Approach to Fuel Taxation

Reaping the Benefits of a Strong Biofuels Industry

The Ethanol IP Evolution

Ethanol's Octane Provides Proactive Opportunity

Good News for Forest Biomass

Biomass Confusion at the EPA

Speaking for Heat, Accent and All

Update on a Mobile Indirect Biomass Liquefaction System

Understanding Further Revised US EPA Boiler Standards

Liability, Insurance Issues in Biofuel Transportation

Plant Appraisals and Fixed Asset Management

Wrong Message, Wrong Time

Big Oil

Featured

Golden Possibilities

Certifying Sustainability

Pieces of the Puzzle

Revitalizing Rubbertown

Combined Calefaction

Words from the Wise

Synergy by Design

The BP Biofuels Story

Betting on Biorefining

February 2012