With the current demand for energy, fossil fuel is estimated to be depleted within 60 to 80 years and energy use will focus on sustainable forms that are cleaner, more reliable and renewable. The most reliable and oldest form of energy is biomass&mdash;the product of photosynthetic organisms such as plants, some microbes and some algae. A closer examination of plant physiology and genetic engineering possibilities offers new pathways to improve bioenergy conversion.
The initial photosynthetic product of plants, glucose, is the immediate energy source for cells that use the sugar to metabolize other forms of cellular energy such as starch, oil and proteins. Some useful products we derive from biomass include biodiesel from algae, cooking oil from corn, and ethanol from sugarcane and corn. To be considered a good biomass candidate for product derivation, a species must satisfy three criteria: be high yielding, easy to grow and contain high levels of extractable content.
One example is sugarcane, a high-yielding tropical grass with a stem diameter of 1 to 3 inches and a height of up to 5 feet or more. Sugarcane&rsquo;s high extractable sugar content accounts for 10 percent of its weight. It is no wonder that the sugarcane species Saccharum officinarum is one of the most important food-producing grasses in the world. Sugarcane requires strong sunlight, much water and a long maturation period.
Another example is hybrid yellow dent corn, a relatively easy spe&shy;cies to grow and one of the most important production grains in the United States. Cultivated mostly in the temperate Midwest, corn is economical to grow and yields a large amount of biomass. The corn kernel is a seed with 3 to 4 percent oil, 9 to 10 percent protein, and about 72 percent starch. The high starch content makes corn a good product for livestock and for the extraction of high-fructose sugar. Currently, almost all of the 200-some ethanol producers in the U.S. use corn. To produce ethanol, however, corn starch must be broken down into fermentable sugars, which makes it less economical than sugarcane with its high extractable content of fermentable sugars.
Nature has endowed certain plants such as sugarcane with enhanced metabolic pathways to produce high sugar content. Molecular biologists can nudge certain unendowed plants, such as switchgrass, toward similar pathways. All plants produce sugar by photosynthesis, but differ in how the sugar is used or stored for easy access. Depending on the physiologic needs of a plant, sugar can be stored in starch, converted into oil, used for producing structural cellulose, or stay in circulation as an immediate energy source.
A major hurdle in ethanol production has always been low yield and the unavailability of quality feedstock. Efforts to increase yield often focus on strategies in producing feedstock with high sugar content, either by genetic engineering or breeding selection. An obvious choice for selective breeding is sugarcane. Its sugar content is good, but its growth rate and ease of cultivation need improvement. Switchgrass is a grass species with a fast growth rate that is easy to grow, but lacks high sugar content. An ideal solution, then, would be to cross sugarcane and switchgrass&mdash;sugarswitch&mdash;which may satisfy all the three criteria of high yield, easy to grow and high extractable sugar content.
The downside to selective breeding is that it involves a long learning curve, and the pattern of inheritance of desirable traits is not always straightforward. An alternative strategy is genetic engineering, which has become more widespread in the past three decades. In engineering plants producing high sugar content, the biology of the target species must be considered. For example, the yellow dent corn kernel is a seed&mdash;a fertilized embryo in dormancy until germination occurs and rapid growth requires the utilization of stored nutrients in the form of starch, protein and oil. In contrast, in rice seed, which has 16 to 20 percent lipid content in its aleurone layer, lipase activity utilizes oil as an energy source. The digested lipid content is used for gluconeogenesis within glyoxysomes. The rapidly growing, germinating seeds are able to convert stored oil into sugar for immediate energy, suggesting an approach to engineering enhanced sugar content in corn kernels or rice seeds.
Under certain conditions, plant oil such as corn triglycerides, can be reverted back into glucose sugar, the substrate for ethanol production. With the current ethanol production efficiency averaging about 93 percent of theoretical yield within the industry, there is not much room for improvement. Attempts at increasing yield should, therefore, focus on the metabolic conversion of oil into sugar.
Mechanistically, triglycerides are broken down into fatty acids and glycerol&mdash;precursors for gluconeogenesis, the pathway that converts biomolecules into glucose. Fatty acids are converted into oxaloacetate using enzymes that include isocitrate lyase and malate synthase (Figure 1). Oxaloacetate is then used for the gluconeogenic conversion into glucose (Figure 2). Another product of triglyceride breakdown, glycerol is metabolized into glyceraldehyde 3-phosphate (GA3-P), a more immediate substrate for glucose synthesis. The pathway is catalyzed by glycerol kinase, G3P dehydrogenase, and triosephosphate isomerase enzymes (Figure 3).
Various attempts at increasing ethanol yield have focused on enzymes or engineering new microbial strains for conversion. Enzyme use is cost-prohibitive, and complexity is an issue with microbial engineering. A different approach to plant engineering opens new possibilities for producing plants fit for high ethanol yield. Plants could be engineered to enhance the expression of key enzymes that metabolize oil into sugar. The key catalysts in the pathways are isocitrate lyase (Figure 1), PEPCK (Figure 2), and glycerol kinase (Figure 3). Studies have shown that isocitrate lyase knockout in Arabidopsis leads to a drastic reduction of gluconeogenesis from oxaloacetate. The lack of malate synthase, however, does not have any effect on gluconeogenesis. PEPCK reduction in Arabidopsis also reduced the sugar levels. In the storage tissues of fatty seedlings, glycerol kinase was shown as responsible for the initial conversion of glycerol into sugar. The studies indicate the power of engineering plants that convert their oil content into sugar.
The potential for yellow dent corn is intriguing, with its 3 to 4 percent oil content. If 95 percent of the oil could be converted to sugar, ethanol yield could be increased by as much as 10 percent, given that oil has more than twice the amount of energy as sugar. Author: Trent Nguyen President, Ebio Consulting (972) 983-1969 ttnguyen@EbioConsulting.OnMicrosoft.com

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A close look reveals metabolic conversion of oil content into sugar is possible

New Pathways Could Improve Ethanol Yields

The most popular take-away food in the U.K. is fish and chips. The frying of all this fish and fries requires quite a lot of vegetable oil. Collecting the used oil from restaurants, bars and cafes for the production of biodiesel has become big business. Between April 2010 and April 2011, the U.K. used 428 million liters of used cooking oil (UCO) for the production of biodiesel. It has become the primary source for biofuel used in U.K. transportation fuel. Of all biofuel used in the U.K., 30 percent is from UCO, 21 percent is from Argentine soy and 20 percent from sugar cane ethanol, according to the U.K. Department of Transport.
The big driver for using UCO biodiesel is the tax incentive of 30 U.S. cents per liter. It is costing the Exchequer &pound;10 million per year (almost $16 million) but, according to the U.K. Sustainable Biodiesel Alliance, provides value in terms of employment and waste recycling. The tax measure ends April 2012, after which UCO biodiesel will receive two tradable certificates (the equivalent of the U.S.&rsquo;s renewable identification numbers)&mdash;double that given first-generation biodiesel from soy or rapeseed. The UKSBA fears that counting UCO biodiesel twice is not adequate to compete with biodiesel from, for example, Argentina. Their concern is based on past experience with renewable fuel certificates that sometimes had a value of zero; and &ldquo;double nothing is still nothing,&rdquo; they say.
Their concern about the risk of too low a market value is justified. Why would a fuel distributor pay more for a double counting biofuel, if he doesn&rsquo;t receive any benefit from it? The target set in the Renewable Energy Directive is mandatory for member states, not for fuel suppliers. A fuel supplier, therefore, doesn&rsquo;t care if the volume is more on paper than the physical volume.
The whole concept of double counting has never been well-thought out. When included in the bill, it seemed a good measure to promote the production of biofuel from waste, residues and lignocellulose. There would be few land use concerns and greater greenhouse gas (GHG) emission savings and it would be a nice way to get to the finish more quickly in terms of volumes.
A full supplier will only pay more for a biofuel if it will give him a clear benefit. For example, if the GHG emission saving is the prime aim of using biofuels, then such a biofuel becomes interesting&mdash;the market will value these nonconventional biofuels more. We don&rsquo;t have this situation yet, and consequently, the once most promising legal instrument to stimulate the development of lignocellulosic ethanol is not contributing to that aim. If today a lignocellulosic ethanol producer would offer his biofuel to the market, he would not see an acceptable return on the higher investment and production costs for making that biofuel.
Later this year, the European Commission will report on second-generation biofuels development.&nbsp; It cannot be anything but disappointing, as there is little investment in new production capacity and hardly any market penetration. If the EU decisionmakers and regulators really want this type of biofuel to take off, a fundamental change in policy is needed. There are a few options: dedicated and mandatory targets coupled to a high noncompliance penalty and/or a tax incentive that is linked to a) GHG saving performance&mdash;the higher the saving, the more tax credit, and/or b) the higher the investment or production costs, the higher the tax credit.
If the double counting mechanism does not change, it will be a double whammy&mdash;no higher market value and no incentive to develop and invest in lignocellulose ethanol production. Author: Robert Vierhout Secretary-general, ePURE Vierhout@epure.org

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Is Double Counting a Double Whammy?

E15 will not be commercially available for widespread use by March. How do I know?&nbsp;
Well, I don&rsquo;t. But over the past year or so, when it seemed like E15&rsquo;s arrival to a convenience store near you was imminent, some of us in the ethanol industry got excited and said publically that we expected it to be available &ldquo;soon,&rdquo; &ldquo;sometime this (insert season here),&rdquo; &ldquo;by late in the next quarter,&rdquo; or some other non-specific yet not-so-far-off timeframe. We were wrong. Every time. Powerful forces conspired to make all of us look bad.
So I now predict that E15 is not going to happen this March. I could point to reasons like EPA waiting until it makes CAFE (corporate average fuel economy) and/or Tier 3 decisions, the futility of finally making E15 available at a time when the impending low-RVP (Reid vapor pressure) season will make it virtually impossible to use until fall, but I&rsquo;m not going to do that. We&rsquo;re just not going to see E15 in March. Mark it down.
Go ahead, Powerful Forces, make me look bad again. Prove me wrong.&nbsp; I dare ya.
On a serious note, March is a time to remember a friend of ethanol. March 26 marks the sixth anniversary of ethanol&rsquo;s first appearance as the fuel of a major motorsport series&mdash;the Indy Racing League&mdash;on a day that will always be remembered instead as the day we lost one of ethanol&rsquo;s most dynamic promoters and spokesmen, Paul Dana.
When it came to ethanol and racing, Paul used to talk about people who &ldquo;get it.&rdquo;
&ldquo;It&rdquo; wasn&rsquo;t about selling ethanol to racers. If every racer in the country used ethanol, in a year we wouldn&rsquo;t use two weeks output from even a single average ethanol plant.
And although motorsports are the number one spectator sport in America, &ldquo;it&rdquo; isn&rsquo;t really about selling ethanol to racing fans, either. As big as racing is, there are a lot more people who don&rsquo;t know the IRL from NASCAR from the World of Outlaws. About 35 million Americans watch some part of the Daytona 500 every year&mdash;meaning about 265 million Americans don&rsquo;t.
&ldquo;It&rdquo; is all about image. &ldquo;It&rdquo; is the old marketing truism: &ldquo;perception is reality.&rdquo;
If ethanol is perceived as a cheap substitute for gasoline, it IS a cheap substitute for gasoline. And with that perception comes all of the concerns that accompany &ldquo;cheapness.&rdquo;
On the other hand, the real &ldquo;reality&rdquo; is that ethanol is a clean-burning, all-American, high-octane motor fuel. Paul Dana knew that the sight of cars whizzing around a track, powered by ethanol, could change the perception of our fuel. By having the IRL, and now NASCAR, use ethanol in extreme race conditions, we demonstrate power and reliability, and we learn about any weakness of the fuel&mdash;if any weaknesses ever appear &hellip;&nbsp;
Paul Dana knew &ldquo;it&rdquo; wasn&rsquo;t about him, the IRL or even racing. It was an opportunity for the ethanol industry to &ldquo;shift gears,&rdquo; and promote ethanol for what it IS, instead of what it is not. Racing shows people ethanol is a high-octane performance fuel, and gives us the opportunity to drive home other benefits.&nbsp;
The best list is still the one that was written on the side of Paul&rsquo;s first IRL car. It said simply: &ldquo;Ethanol: Clean. American. Renewable.&rdquo;
&ldquo;Cheap&rdquo; was nowhere to be found. Author: Ron Lamberty Senior Vice President, American Coalition for Ethanol (605) 334-3381 rlamberty@ethanol.org

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Timid Predictions and Bold Vision

News that Iran&rsquo;s navy could stop oil shipments through the strategic Strait of Hormuz sent oil to an eight-week high in January. With Iran and a handful of other countries controlling the lion&rsquo;s share of the world&rsquo;s oil, any disruption in supply implies disaster for America&rsquo;s still-sputtering economy.
Our nation imagines itself the most free and secure in the world, but the volatility of the global oil market shows how vulnerable we are as a nation to saber rattling by strongmen and dictators. Every president since Nixon has warned that the influence of foreign oil in our economy is threat to both our national and economic security. Yet for more than four decades, our federal government has failed to ultimately deal with the problem of our national addiction to foreign oil. In 2012, Growth Energy is reminding Congress and America that ethanol is a key to finally breaking our oil addiction and achieving energy independence. Ethanol is not a someday fuel; it is replacing foreign oil today, and if we lift the artificial hurdles blocking access to the fuels market, it can replace more.
So how do we create a level playing field for ethanol to compete with oil?
First, we must open the market to more ethanol to strip oil of its strategic status as a commodity. A full move to E15 will give consumers greater access to clean, renewable ethanol today. By expanding the market through E15, we can spur private capital investment into the development of ethanol from cellulosic biomass. With cellulosic ethanol, we can turn feedstocks such as corn stover, citrus waste and even woodchips into clean, renewable fuel.
Second, the industry needs to expand its infrastructure, in the form of flex-fuel pumps and flex-fuel vehicles, to create a market where consumers have a choice at the pump.&nbsp; By encouraging auto companies to manufacture their fleets to run on higher blends of ethanol, we can reduce America&rsquo;s dependence on foreign oil, create green jobs that can&rsquo;t be outsourced and keep more money here in the U.S, where it can support our domestic economy.
Third, Congress should maintain support for the renewable fuel standard&mdash;the only national energy policy in place today designed to reduce our dependence on foreign oil by gradually increasing the use of renewables in our fuel supply. The RFS has been the single most effective policy at displacing foreign oil. Because of the stability created by the RFS, the ethanol industry supports more than 600,000 American jobs that can&rsquo;t be outsourced and helps us take back some of the $300 billion a year we send to foreign economies for access to oil.
We have a plan for energy independence, and we must stick to it. The future success of the domestic ethanol industry and the key to America&rsquo;s energy security depends on solid policies that create a fair market where consumers have a choice at the pump. It is imperative for our country to produce and use our own sources of renewable energy so we don&rsquo;t have to rely on foreign nations as heavily. American ethanol is the only commercially viable alternative fuel that is proven to reduce harmful emissions in the air, create jobs at home and reduce our dependence on foreign oil.
For 40 years, we have been at the mercy of a foreign cartel that has controlled one strategic commodity: oil. A strong commitment to policies that ensure access to clean, domestically produced alternatives like ethanol will help America break free from oil&rsquo;s stranglehold. Author: Tom Buis CEO, Growth Energy (202)545-4000 tbuis@growthenergy.org

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Breaking Oil's Hold  Over America

Let&rsquo;s be perfectly candid: the progress of cellulosic and advanced ethanol production has been far slower than everyone in the ethanol industry had hoped to see. Prior to the 2008 economic collapse and the attendant finance freeze, such promising progress was being made that the oft-repeated line of cellulosic ethanol being just five years away seemed overly pessimistic.&nbsp;
The slower rate of commercialization has created confusion, consternation and calls for an end to efforts to help America&rsquo;s ethanol industry evolve. These feelings, as reasonable as some may seem, ignore a very real truth: failing to fully harness the potential of turning American biomass into American renewable fuel will greatly impale, if not mortally wound, the nation&rsquo;s ability to end our addiction to fossil fuels. That means that we must push through, ignoring the pitfalls of falling back on old fossil fuel technologies just because we are comfortable and familiar with them. We must recommit our innovative spirit to shepherding promising new technologies over the finish line.
To claim that the wait for cellulosic ethanol production is over, or nearly over, would be misleading and undermine the credibility of American ethanol producers who have met the challenges put before them. It is fair to say that the wait for proven technologies in the market is shorter today than it was just a few years ago.
To wit, companies across the nation are building commercial-scale facilities to turn feedstocks other than grain starch into renewable fuel. Abengoa Bioenergy is building a 25 MMgy biorefinery in western Kansas that will produce ethanol and power from both grain and nongrain feedstocks. ZeaChem just received a USDA loan guarantee to build a biorefinery in Oregon that will turn wood into a variety of renewable products, including fuel. Likewise, projects in states as diverse as Iowa and Alabama, Florida and Illinois, are redefining what it means to produce ethanol in the United States.
These investments, and future investments once these technologies are proven efficient, would not be possible without consistent public policy. America must keep in place critical public policy initiatives that will help drive the evolution of American ethanol production.
Before year&rsquo;s end, Congress should pass a multi-year extension of the Producer Tax Credit for cellulosic ethanol production as well as the Accelerated Depreciation Allowance for Cellulosic Biorefineries. These vital tax incentives provide the kind of security private companies and investors need to bring demonstrated ethanol technologies out of the lab and into the real world. Congress must also resist calls from the oil and gas patches, as well as from the angry birds and mad cows, to reopen, revamp, or repeal the renewable fuel standard. While cellulosic ethanol production has yet to meet the mandates called for by Congress, this standard is the lifeline keeping investments in cellulosic and advanced biofuels alive. Through the power provided to the U.S. EPA, shortfalls in cellulosic biofuel availability in the near term can be met through commonsense discussions with all stakeholders. Such shortfalls should not be the rationale to end the RFS, as it has proven to be the most effective tool the U.S. has implemented to directly replace imported oil with domestic, renewable alternatives.
Congress should also get out of the way of emerging technologies by eliminating century-old subsidies for very mature fossil fuel industries that dramatically distort the market. Right now, renewable fuels are the gamblers in the oil industry&rsquo;s casino, and we all know the house always wins.
Finally, continued investments in ethanol and alternative fuel infrastructure must be made. Taking a long-term view of America&rsquo;s energy needs necessarily requires investment in technologies that will give a diverse consumer base the ability to choose the fuel and fuel blend that is best for them. Blender pumps, flexible-fuel vehicles, and other common-sense technologies give the power of choice, and the purse, back to consumers.&nbsp;
America&rsquo;s energy future, and that of its growing and evolving renewable fuel industry, will not wait. A failure to act with vision will squander the gains America has made in energy security and cutting edge renewable fuel technology. Our answer to our grandchildren&rsquo;s questions about what we did to make America great should not be we further embedded the status quo. Author: Bob Dinneen President and CEO of the Renewable Fuels Association (202) 289-3835

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Ethanol's Future Won't Wait

I just finished reading a book titled Blue Ocean Strategy, by Chan Kim and Renee Mauborgne. It&rsquo;s not a new book; in fact it was first published in 2005, so many of you may have already read it. It relates to the development of business strategies that move a business or an entire industry, for that matter, into a different realm, a blue ocean strategy instead of a red ocean strategy.
A red ocean strategy is one that many businesses and industries continue to operate in, slogging it out with the competition, continually addressing the same issues, fighting the same fights year after year, sometimes gaining ground, but at a high cost. Unfortunately, this has become the norm for many industries.
As I read the book I kept coming back to the ethanol industry and how such a strategic shift might be just what we need. I bring this up, not as a criticism of our industry or how it has progressed, but more out of curiosity&mdash;is there a better way, a blue ocean strategy where we begin to control our direction?
I&rsquo;m talking about a strategy that looks at the markets, the methodology, the objections and the opportunities in a whole new light. I&rsquo;m not promoting the book, I have no vested interest, but there is something rather intriguing about the concept of breaking out of the red ocean and setting sail on a blue ocean in a new direction with a whole new strategic plan. As the book points out early on, &ldquo;There are no excellent permanent companies just as there are no excellent permanent industries.&rdquo; The idea is to develop a strategy that creates an uncontested marketplace, makes competition irrelevant and creates dynamic new markets by attracting all levels of consumers, who currently may not even be our customers.
There are literally hundreds of businesses and industries that have successfully developed blue ocean strategies. One interesting example is Cirque du Soleil. They changed the entire circus industry from one of three rings, high cost and dwindling attendance by parents and children, to a whole new uncontested market for adults and corporate clients that made the competition irrelevant.
Another excellent example is the U.S. wine industry. The $20 billion U.S. wine industry is bogged down in a red ocean of competition. Wine snobbery, proper aging, complexity, price and overwhelming selection, has created a market that the average nonwine connoisseur simply does not feel comfortable in.&nbsp; Then along came Casella Wines of Australia with Yellow Tail. Priced right, properly marketed as a social drink, a wine not targeted towards the connoisseur, but to the average consumer, with simple traditional varieties. It didn&rsquo;t steal sales from the wine industry, it created a whole new market of previously nonwine drinkers and, in 2003, sold 4.3 million cases and was the number one selling red wine in the U.S., outstripping California labels.
Frankly, I&rsquo;m not sure where this whole story is going, except to wonder, is there a better way for this industry, a blue ocean strategy? The ethanol industry has continued to drive costs down, but have we sufficiently demonstrated product value to the consumer, especially to a huge, yet untapped, customer base? We have successfully fought numerous legislative battles, but have we resoundingly convinced Congress that ethanol needs to be the national alternative fuel of choice? How can we make gasoline irrelevant to the success of our industry? What new market opportunities can be developed to extract us from the red ocean we have swum in for the past three decades?
I offer you nothing more than food for thought this month, and will leave you with a line to ponder: &ldquo;There are no excellent permanent industries.&rdquo;
That&rsquo;s the way I see it.
Author: Mike Bryan Chairman, BBI International mbryan@bbiinternational.com

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Pondering a  New Strategy

Lowering a plant&rsquo;s total cost per gallon to the optimum level is a daunting task, but it is possible already today. The key is finding the optimal sweet spot. For each and every cellulosic ethanol plant there is a unique sweet spot&mdash;that one specific point where all its parameters converge flawlessly to attain the lowest total cost per gallon possible. Cellulosic ethanol plants that have mastered identifying and optimizing their process sweet spot have been able to obtain the financing they require and travel down the path to commercialization. Yet, the optimal sweet spot is not easy to find. A myriad of variables must be skillfully balanced that take the right tools, a deep understanding of each variable and its synergies with others, and a holistic view of optimization.
By utilizing this sweet spot mindset and methodology, itemized costs become less relevant as the spotlight is moved towards the total cost per gallon&mdash;matched up against the expected selling price of the ethanol. In fact, focusing on reducing all input costs separately without recognizing the interdependencies among the variables could have the opposite effect of driving up the total cost per gallon and thus also the selling price needed to make the investment case bankable. Proper modeling allows us to understand the total cost drivers and tweak them to achieve competitive total cost per gallon. &nbsp; Game of Trade-offs Making ethanol from lignocellulosic feedstock is a game of trade-offs. Due to the relatively complex structure of biomass in its native feedstock form, it is, to a large extent, impervious to enzyme and microorganism attack, and pretreatment must be applied to open up the structure. The product stream that results from the chosen pretreatment often contains both physical and chemical characteristics that can prevent the enzyme proteins from catalyzing the depolymerization of the cellulose and hemicelluloses into monomeric sugars, thus inhibiting further fermentation into ethanol.
The research and development team at Novozymes A/S has identified that modeling can play a key role in identifying and realizing the lowest total cost per gallon. The focus of the approach is on parameters such as plant design and construction, as well as process optimization to achieve targeted overall cost goals. The sweet spot approach facilitates an understanding of the many process variables and the synergistic effects they have on one another. This enables well-informed economic decisions to be made by utilizing a dynamic cost modeling tool.
For processes with a homogeneous and well-defined raw material (such as corn) going to a single product (glucose), simple correlations based upon laboratory data can be used to point to the most economical process. For the considerably more complex biomass-to-energy process, cost modeling can simplify and expedite component accounting. This complicated accounting allows for many factors to change simultaneously and arrive at a process cost for each combination of values.&nbsp; For example, in the hydrolysis step alone, there are numerous factors to consider, some of the most relevant being:&nbsp; enzyme dose, total solids loading, hydrolysis time, reaction temperature and mixing strategy. Although it sounds optimal, getting to 100 percent conversion is probably not the best case scenario. The sweet spot model takes into account total production parameters and optimizes in a holistic way (see Figure 1). Enzyme Key While enzyme cost is no longer one of the major cost components as it was in years past, it is still essential to increase efficiency and lower costs for these key ingredients. The newest product on this path from Novozymes&nbsp; is Cellic CTec 3, a cellulase that unlocks new ways to optimize pretreatment and hydrolysis enabling plants to lower the total cost per gallon to a level that is fast approaching that of corn ethanol and fossil-based fuels. The new enzyme promises the following improvements:
&bull; Significant reduction in a plant&rsquo;s total cost per gallon. &bull; An improvement in hydrolysis cost-efficiency across processes and substrates. &bull; Lower dose required. &bull; Shorter hydrolysis time needed. &bull; Consistent higher biomass conversion to sugar (with no glucose inhibition). &bull; The possibility for higher total solids loading. &bull; An opportunity to reduce pretreatment severity. Finding Fiberight&rsquo;s Sweet Spot Fiberight LLC, a developer of a conversion process for municipal solid waste (MSW) to biofuel, has been extensively collaborating with Novozymes for the past three years. The two companies focused on sharing R&amp;D work and obtaining process optimization to specifically meet Fiberight&rsquo;s unique needs. Resulting pretreatment optimization found efficiencies throughout the process and brought down the total cost per gallon as well as the enzyme cost from $5 to $1 per gallon. With the performance improvement gained and the move to Cellic CTec3, Fiberight was able to reduce its enzyme dosing by 80 percent and at the same time increase its biomass conversion to glucose by 50 percent. Another key goal achieved was higher conversion yields on actual MSW biopulp material (75 percent on substrate with 60 percent cellulose), which has improved profitability and frees capital to make investments in other optimization efforts. Also, a move to milder pretreatments&mdash;from a high temperature process to simple jet cooking&mdash;significantly improved energy efficiency and facilitated a redesign of the entire plant process. Fiberight has achieved the lowest total cost per gallon for its process, which has spurred the decision to upgrade its Blairstown, Iowa, demonstration plant to commercialization level in the first half of 2013. Partnerships Enable Commercialization Ultimately it&rsquo;s only total cost per gallon of cellulosic ethanol that matters, but reaching the absolute lowest possible level is extremely hard to achieve. Reducing total cost per gallon to a commercially relevant level required for scale-up, can only be achieved by skillfully balancing many variables&mdash;not the least of which is overall capital and enzyme costs. This process requires insights and decision making that only comes though close partnerships. This is the premise that Novozymes has been following for over a decade. Working together with partners to share the load, and in the process gaining the insights, the approach to partnering and the tools needed to enable our partners to move to commercialization ahead of the pack. Author: Jason M. Blake Global Director, Biomass Business Development, Novozymes jsbx@novozymes.com

Every choice made in the cellulosic ethanol plant has ramifications later in the process. Cost modeling can simplify and expedite component accounting.

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Beyond a certain level, higher conversion targets dramatically increase the cost to produce a gallon of ethanol. 

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Through strong collaboration, Fiberight and Novozymes have overcome challenges and, by combining process optimization and high-performing enzymes, reduced enzyme dosage and increased yields leading to the decision to build a demo-scale plant.

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Finding the sweet spot requires a holistic view of optimization

Total Cost Per Gallon:  The True Measure of Success

The utilization of supercritical water in the ethanol process could dramatically change both the corn starch and cellulosic processes, potentially simplifying the process, eliminating inputs and reducing energy inputs, even while using extremely high-temperature water.
The conversion of corn to ethanol presently involves 13 distinct steps starting with step 1, the complex planting and fertilized growing of the crop that is carried out by the farmer. The mechanical engineering activity of harvesting and kernel separation constitute step 2.&nbsp; The total harvested biomass amounts to roughly 9 tons per acre.&nbsp; Of this, only about one-third (7,110 pounds, at $7 per bushel or 13 cents per pound) of the corn moves forward to the ethanol facility as a source of starch for chemical processing. Therefore, about 6 tons of the low-value stalks, cobs and leaves produced by the farmer currently plays no role.
Step 3 of the manufacturing process is reducing the physical size of the kernels for subsequent hydrolysis in the slurry tank, step 4; the jet cooker, step 5; and enzymatic liquefaction, step 6. After fermentation of the sugars generated from the kernels in step 7, the resultant acqueous ethanol produced is recovered from the beer in step 8 by distillation. The water in this distillate is removed with molecular sieves in step 9 and the anhydrous ethanol obtained is then denatured with gasoline in step 10. The economically mandatory processing of the stillage residues from the distillation system to yield dried distillers grain with solubles (DDGS, valued at about $220 per ton, or 11 cents per pound)&nbsp; is accomplished&nbsp; by sequential centrifugation, step 11, evaporation, step 12, and drying, step 13.
Comparison of the energy requirements of each of these steps relative to the energy content of the total ethanol yield shows where attention should be focused if the overall process efficiency is to be significantly improved. A 2008 review by A.A. Peterson and colleagues in the journal Energy Environmental Science suggested that about 60 percent of total energy input is consumed by the liquefaction, distillation and DDGS preparation steps. Supercritical Changes As an alternative to this traditional system, a new pathway based on the use of supercritical water, offers the promise of achieving reduction of this large energy input by virtue of the remarkable changes in the chemical reactivity of water observed when it is heated to above a temperature of 374 Celsius (705 degrees Fahrenheit), discussed in a 1999 paper by P.E. Savage published in Chemical Reviews. For example, Japanese scientists S. Saka and T. Ueno showed in research published in 1999 that cellulose is transformed into glucose in yields that are almost quantitative in a few seconds, without the need for acid catalysis.&nbsp; Other polysaccharides, of course, will behave similarly. Waxy and oily esters will also be rapidly cleaved so that the kernels may not need to be milled at all and the associated equipment and energy costs thus avoided.
An additional energy-saving consequence of the exposure of the whole kernels to supercritical water will be that the slurry tank with enzyme addition, the subsequent jet cooking and liquefaction&nbsp; will all become superfluous. The subsequent ancient fermentation of step 7 with its inherent inefficiencies should remain substantially unchanged, except for the fact that the amount of the incoming sugars will be augmented since the precursor starch will have been completely hydrolyzed by the supercritical water so that none of the starch is wasted in the generation of nonfermentable oligomers.
These changes will reduce the energy input associated with the diminished amount of material going through the centrifugation, evaporation&nbsp; and&nbsp; drum drying procedures needed to obtain DDGS solids that have a market value that is actually less than the original feedstock corn kernels. Biomass Application In addition to these energy-saving advantages, the aid of supercritical water can also be invoked to utilize the 6 tons per acre of biomass grown at the same time as the corn kernels. The polysaccharide content of the stover will be hydrolyzed to sugars available for fermentation, but what about the lignin content?&nbsp;
Lignin can be visualized as a mass of individual aromatic rings joined by nonaromatic linkages, as described by J. Urquhart in a paper in Chemistry World 2011. At short reaction exposures, supercritical water does not affect aromatic rings but does cleave the inter-ring linkages. As a result, the giant lignin macromolecule is converted into a mixture of low-molecular weight phenols, as was shown in research published in 2002 by K. Ehara, S. Saka and H. Kawamoto in the Journal of Wood Science. With the current price of oil-derived phenol at about 86 cents per pound, there is an attractive economic opportunity for lignin-derived phenols as a replacement for some of the petroleum-based phenol now used in large-volume wood adhesives. Analogously, all of the structurally complex mycotoxins potentially present in corn will be cleaved into smaller and simpler nontoxic molecules that are unlikely to affect adversely the nutritional quality of any DDGS produced.&nbsp;&nbsp;&nbsp;
From all of the foregoing, it is clear that there are excellent reasons why chemical-free supercritical water offers a greener prospect of significantly improving the economics of obtaining ethanol and chemicals from entire corn plants. The maximum benefits will be secured when the treatment with supercritical water is carried out continuously in an extruder, as recently disclosed in U.S. Patent No. 7,955,508 entitled &ldquo;Supercritical Fluid Biomass Conversion Systems.&rdquo;&nbsp; This patent teaches that a specialized extruder can convey selected biomass materials from an upstream hopper to a downstream supercritical fluid reaction zone, while increasing the pressure from atmospheric to greater than 3,200 psi. The supercritical fluid reaction zone further heats the flowing and pressurized biomass materials to supercritical conditions by means of a circumferentially positioned, high efficiency, alternating current induction coil. The liquefied reaction products are then expelled through a specially configured and proprietary spear and tube reactor that ensures complete biomass depolymerization and liquefaction. The liquefied reaction products are next expelled into an innovative expansion/separation chamber that contains liquid water and a hydrocarbon solvent to facilitate liquid-liquid extraction and phase separation of the resulting products.
A detailed economic analysis of all of the labor, energy and equipment costs including depreciation associated with the system has shown that undried biomass can be transformed for less than a nickel per pound in the Pacific Northwest. Authors: G. Graham Allan Professor of Chemical Engineering, University of Washington, Seattle (425) 486-1649 create@uw.edu John R. Di Iorio Chemical Engineering Student Milo U. Zorzino Chemistry Student University of Washington

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High temperatures yield remarkable changes in water's chemical reactivity


Supercritical Water Could Provide Greener Pathway to Corn Ethanol

Ethanol currently comprises 85 percent of global biofuel production, with nearly 90 percent of ethanol production coming from just two producers, the U.S. and Brazil. Ethanol yield per hectare varies widely, due to differences in crop yield by country, as well as the efficiency of conversion. Brazil has the highest ethanol yield per hectare of 5,476 liters (585 gallons per acre), from an average yield of sugar cane of 73.5 tons per hectare and a conversion efficiency of 74.4 liters of ethanol per ton of feedstock. In the U.S., average corn yields of 9.4 tons per hectare and 399 liters-per-ton conversion efficiency produces 3,751 liters of ethanol per hectare, according to one 2007 estimate.
Up to now, there has been no reported use of agave feedstock for ethanol production. In Mexico, most industries producing alcoholic beverages from agaves, such as tequila or mezcal, have seen successful production levels. In late 2007, the tequila industry reached a historic production of 292.1 million liters, of which 149.7 million was exported to more than 100 countries. The mezcal industry also achieved a record 500,000 liters. Other products manufactured from agaves include pulque and bacanora (beverages), inulin (a plant fiber used as a food additive) and fructose syrup.
Agave used for tequila and mezcal is cultivated on a large scale in Mexico while other types are planted in smaller plots or on edges of fields. Agave plants are found in all kind of soils, from shallow and eroded with steep slopes to flatter lands with better fertility conditions. In the State of Jalisco, where most agaves are grown, the Tequila region has a 200-year tradition of cultivating blue agave. In this area, the altitude ranges from 800 to 1,360 meters (2,500 to 4,400 feet), the average annual rainfall is 1,340 millimeters (53 inches), the average temperature ranges between 22 and 26 degrees Celsius (71 to 79 degrees Fahrenheit). In the Los Altos region, another area of great importance for agave cultivation in Jalisco, the altitude ranges between 1,600 and 2,020 meters, and the climate is mild. The average annual rainfall varies from 1,420 to 1,500 mm, the average temperature ranges between 18 to 26 C.
Plant populations can vary from 800 to 5,000 plants per hectare, although an average of 3,000 agaves per hectare are planted in commercial plantations. Sometimes seasonal crops such as corn and beans are sown between agave rows. Comprehensive control of pests, diseases and weeds is required and fertilizer is applied as needed. Mature plants can be harvested at 6 to 12 years. Expert workers, called jimadores, use a long-handled blade to hand harvest the plants, cutting the stems first, then trimming the leaves to be left on the field while the stems are taken to the factory for processing.&nbsp;&nbsp;
Statistical data on average yields per hectare for agave is not available, but in several meetings with agave producers, most agree that small producers and small industrialists producing their own raw material harvest agave heads that average 25 to 30 kilograms with 17 to 21 percent sugar content and harvest cycles of eight to 10 years, utilizing few agronomical practices. On the other hand, large tequila producers who raise most of their own raw material, harvest agave heads that average 40 to 55 kg with 24 to 27 percent sugar content and cycles of six to eight years to harvest time. These producers apply appropriate crop practices on their plantations.
In visits with agave producers, we have admired pictures where technicians pose beside huge agave heads. Despite efforts by many, these magnificent plants with exceptional characteristics for high yields have not been reproduced by the traditional method of suckers. Instead, new methods are in development to develop high-yielding agave varieties from mother plants with characteristics of high weight of the stem or head, sugar content, age to maturation and architecture of the plant (which affects the yield).&nbsp;&nbsp; The establishment of highly productive plantations from these new varieties promises to supply traditional agave markets as well as introduce agave as a competitive ethanol feedstock.
As researchers in the Plant Science Department at Chapingo Autonomus University, we first worked on applying biotechnology techniques on the agaves starting in 1979. We developed an in vitro propagation protocol for henequen (Agave fourcroydes Lem.) and initiated an in vitro germplasm bank. The first plantation with agaves reproduced in the laboratory was established in the State of Yucatan. In 1981, we continued the investigations with the agave for tequila (Agave tequilana W. blue agave) and the agave for mezcal (Agave angustifolia Haw.) and developed the specific protocols for their in vitro propagation. In 1989, we planted the first blue agave and agave for mezcal plots in the State of Jalisco, and six years later we harvested the stems and produced the respective alcoholic beverages.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
After years of research work and the observation of millions of plants, we have selected those agaves whose stems weigh from 140 to&nbsp; 213 kg, with 17 to 38 percent sugar content and a six-year harvest cycle.
With the methodology developed for the agave germplasm bank, we have continuously kept plants under in vitro conditions for 30 years. The characteristics of these agaves when they have been grown in the field are equivalent to the original mother plants. Thus, it is possible to conserve agaves of these species with diverse outstanding characteristics in the germplasm bank for long periods of time.
Another result of the applied methodology is the development of a variety of agave for mezcal that we are about to register in Mexico. The main characteristics of this agave variety are stems of 150 kg with 27 percent sugar content and six years to harvest time.&nbsp; The plant characteristics are presented in the comparison of ethanol production from corn, sugarcane and agave found in the table.
An agave variety with stems of 150 kg and 27 percent sugar content, grown at a density of 3,000 plants per hectare and harvested in six years has a potential annual ethanol yield of 7,500 liters per hectare. This yield is highly superior to those reported for corn and sugarcane. Higher yielding varieties of agave still can be developed from elite plants seldom found in the plantations. Second-generation ethanol production from cellulose contained in leaves and the waste pulp of the agave stem will considerably increase the yield.
Though yields from agaves raised by tequila and mezcal producers are not presently competitive with sugarcane and corn, we propose these high-yielding varieties in development could allow us to take advantage of this feedstock to produce tequila or mezcal and become a viable and competitive option for ethanol production. &nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp; Authors:&nbsp; Remigio Madrigal-Lugo Alejandro Vel&aacute;zquez-Loera Researchers, Plant Science Department Chapingo Autonomus University 01 (595) 95 21500 ext 6215 remigiomadrigal@hotmail.com alevelo4207@hotmail.com

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Remigio Madrigal-Lugo  stands by a specimen from an agave variety that produces stems of 150 kg with 27 percent sugar content and six years to harvest time.

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High-yielding varieties promise agave-based ethanol could surpass 
even sugarcane yields

Researchers Evaluate Agave's Potential for Ethanol

In November, the U.S. EPA and the National Highway Traffic Safety Administration jointly announced the next step in the Obama administration&rsquo;s plan to improve vehicle fuel efficiency and significantly reduce emissions over the next 15 years. The proposed Corporate Average Fuel Economy standards and greenhouse gas (GHG) emissions standards unveiled by the agencies, which reportedly had the support of major automakers and environmental groups, would steadily increase fuel efficiency requirements for light-duty truck and passenger cars from an average of 34 miles per gallon (mpg) in 2016 to more than 50 mpg in 2025 and reduce allowable emissions to 163 grams of CO2 per mile in model year 2025 vehicles.
To meet the more stringent fuel standards, the NHTSA and the EPA said they believe engineers will continue to make advancements in vehicle technologies, including engines and transmissions, but also in areas such as vehicle weight reduction, aerodynamics and air conditioners. &ldquo;NHTSA&rsquo;s and EPA&rsquo;s technology assessment indicates there is a wide range of technologies available for manufacturers to consider in improving fuel economy and reducing GHG emissions,&rdquo; the NHTSA stated. &ldquo;The proposals allow for long-term planning by manufacturers and suppliers for the continued development and deployment across their fleets of fuel-saving and emissions-reducing technologies.&rdquo;
Automakers have already begun to roll out engine technologies that can be used to both improve efficiency and reduce emissions. General Motors Co.&rsquo;s Ecotec engine and Ford Motor Co.&rsquo;s Ecoboost engine, for example, feature turbocharging and direct fuel injection, which enable the smaller engines to consume less fuel than their predecessors while still offering similar performance.
This type of engine improvement is a definite step in the right direction, but will it be enough to meet the stringent requirements proposed for 2025? With this in mind, ethanol industry stakeholders recently funded two separate studies to examine ethanol&rsquo;s true potential as a fuel and how it might be used to assist automakers in meeting national fuel efficiency and emissions reductions goals. Technology Boosts Recently, the Renewable Fuels Association contracted automotive engineering group Ricardo Inc. to evaluate engine technologies and to explore the potential role biofuels has in these changes, focusing specifically on how higher-octane fuels can contribute to increased efficiency in newly designed engines. &ldquo;We saw the converging vehicle-specific regulations as an issue that is not simply solvable through new vehicle engineering,&rdquo; says Kristy Moore, the RFA&rsquo;s vice president of technical services. &ldquo;We believe these regulations will force a change to the fuel as well as changes to the vehicles.&rdquo; Ricardo&rsquo;s independent testing reinforces that opinion, showing that higher octane fuels can play a valuable role in improving fuel efficiency and, as a direct side effect, also reducing emissions.
To complete the study, Ricardo researchers first plotted what they believe is a roadmap of engine technology improvements for the next 15 years. They determined that while electric vehicles will continue to be a popular concept, nearly all of the vehicles in the U.S. in 2025 will still be powered by some type of liquid fuel-fed engine. &ldquo;They [electric vehicles] may be very high profile, but in terms of actual number of new vehicles sold, it&rsquo;s going to be pretty small,&rdquo; says John Kasab, chief engineer and
Ricardo and author of the RFA&rsquo;s report. &ldquo;The majority of vehicles are still going to have internal combustion engines and almost certainly have gasoline, spark-ignited engines in them. They may be in hybrids, they may be in advanced conventional vehicles, but people are still going to go to a fueling station, they&rsquo;re still going to have to put liquid fuel in the tank.&rdquo;
Ricardo further found that while some of the engine technologies being developed by automakers are neutrally impacted by higher-octane fuel usage, others&mdash;such as direct injection and turbocharging&mdash;readily lend themselves to the use of fuels with octane ratings greater than 87, which is the standard rating for unleaded gasoline today. This is due to several factors. Boosted engines such as the Ecoboost or Ecotec are designed to allow for increased air pressure to be pumped into the cylinder. This improves the efficiency of the engine but it also makes the engine thirsty, essentially, for higher octane, Kasab says, because while higher compression ratios improve fuel performance, they can also cause the engine to reach its knock limit (the point at which uncontrolled combustion occurs) more often. Higher octane fuels can push out the knock limit of engines, allowing them to run at higher speeds and higher loads before knock occurs. Ethanol specifically offers another benefit in that it has a higher latent heat of vaporization, meaning that the fuel can absorb more heat from the combustion, therefore the engine runs cooler than it would when using other fuels. Thus the compression ratio of an engine can be increased to compensate for the difference in combustion temperature and allow the engine to run at the original temperature.
Rod Beazley, Ricardo&rsquo;s project director, engines, says his group&rsquo;s research proves that to meet future fuel efficiency and emissions requirements, vehicles will likely require a combination of engine technology improvements and higher-octane fuels, whether it be ethanol-blended fuel or another high-octane fuel. &ldquo;There is some low-hanging fruit in terms of fuel economy because for every unit increase in compression ratio, there&rsquo;s a 3 percent fuel economy benefit,&rdquo; he says. &ldquo;And to increase your fuel compression, you need a higher-octane fuel.&rdquo; This presents an interesting quandary for automakers, however, because while they are required to meet national fuel standards, they must also continue to design engines to operate on the fuels available to consumers. And high-octane fuels are not currently widely demanded on the market. &ldquo;They can&rsquo;t develop an engine for a higher-octane fuel if it&rsquo;s not available in the field,&rdquo; Beazley adds. The Optimum Number Ricardo did not attempt to determine which ethanol blend would be ideal for use in technologically advanced engines, but another year-long test recently completed by powertrain systems developer AVL Powertrain Engineering and funded by ICM Inc. and the National Corn Growers Association came a little closer to identifying that optimum number. For this research, AVL engineers added various ethanol percentages to base fuels and tested them in three fuel delivery systems&mdash;the port injection system commonly used in vehicles today, a direct injection system and a system that simulated testing procedures for current octane test measurements&mdash;to accurately evaluate how ethanol performs at specific blends. ICM&rsquo;s research data also showed that higher-octane fuels, such as ethanol, can be beneficial in meeting fuel efficiency requirements, but further concluded that midlevel ethanol blends offer more value than has previously been estimated, particularly when used in direct injection fuel delivery systems.
&ldquo;The findings of this study further support our existing understanding of ethanol in that they [the ethanol industry] demonstrate its inherent ability to meet our nation&rsquo;s need for an affordable, sustainable domestically produced fuel source,&rdquo; NCGA Ethanol Committee Chairman Chad Willis said in a statement. &ldquo;NCGA, together with the states that also contributed, funds studies such as this to add to the data on biofuel. We do this not only as proponents of corn farmers, but also as citizens concerned with finding the innovative solutions that will help our nation improve the economy, environment and national security.&rdquo;
ICM&rsquo;s full report will be released in April at the annual Society of Automotive Engineering conference, but early details indicate that E30 may be the so-called sweet spot for octane performance. A summary released by ICM noted that it will be &ldquo;critically important&rdquo; for vehicles to operate at higher loads to obtain higher efficiencies and meet future fuel standards. The data supports that intermediate blends such as E30 can play an important role in meeting those standards, according to the summary.
&ldquo;This new testing data has proven to be a great tool to illustrate how much performance can be achieved by simply adding ethanol to gasoline,&rdquo; says Steve Vander Griend, head of ICM&rsquo;s research and development of ethanol engines. &ldquo;We are seeing a significantly higher value for ethanol and use of intermediate blends to support the changing needs of the automakers and the new fuel efficiency standards that have been issued.&rdquo;
Vander Griend says ICM is already working on the second phase of testing, which will further demonstrate the value of high-octane ethanol in new engines as well as focus more attention on emissions aspects and validate actual mileage per gallon. He expects that phase of research to be complete by the end of March. Moore says the RFA will also continue to fund research dedicated to identifying optimal ethanol blends. OEMs So far, no study has attempted to determine exactly which octane rating would be the preferred step up for fuel-efficient engines. It is generally believed this is a question best left for the original equipment manufacturers (OEMs) to answer. In a statement provided to EPM, GM says it supports the need for higher-octane fuels in concert with other manufacturers through the Alliance of Automobile Manufacturers, a group that represents 80 percent of new car sales in the U.S. and includes members such as Ford, GM, BMW, Mercedes-Benz and Toyota. GM further stated that it supports higher-octane fuels, including ethanol, because of their favorable impact on fuel economy.
&ldquo;Gasoline-ethanol blend fuels can be formulated to have octane characteristics that are very desirable for displacement-reduced or turbo-downsized engines,&rdquo; says Mark Maher, GM&rsquo;s executive director of powertrain vehicle integration. &ldquo;Additionally, these blends have combustion chamber cooling characteristics that, when combined with direct injection technology, are helpful to enable marginally higher compression ratios, which improves engine thermal efficiency. The ability to capitalize on this opportunity in production vehicles depends upon alignment of certification fuels with in-use field fuels as well as with stringent emission and fuel economy regulations.&rdquo;
In testimony delivered to the EPA earlier this year at a hearing on the proposed CAFE and emissions standards, Mitch Bainwol, president and CEO of the Alliance of Automobile Manufacturers, said it will ultimately be the consumers who decide if more fuel efficient vehicles are worth the additional costs. Future fuel prices are difficult to predict, he said, and fuel economy often ranks low on the consumer&rsquo;s list of priorities when selecting a new vehicle. He recommended that the agency seek out peer reviews to determine whether the costs of advanced engine technologies are declining as expected, evaluate consumer response to fuel prices and determine whether liquid fuels can support the fuel-efficient technologies being introduced by engine designers. &ldquo;Ultimately, consumers should decide what best meets their needs,&rdquo; Bainwol said in his testimony. &ldquo;Vehicles that run on gasoline, diesel, biofuels, electricity, hydrogen and natural gas will all play a role in improving fuel efficiency and reducing greenhouse gas emissions.&rdquo;&nbsp; Author: Kris Bevill Associate Editor, Ethanol Producer Magazine (701) 540-6846 kbevill@bbiinternational.com

When considering projected vehicle sales, the National Highway Traffic Safety Administration estimates that passenger cars should have an average required fuel economy of 56 miles per gallon by 2025.

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New testing is proving that fuel efficient engines, such as General Motors Co.â€™s direct injection, turbo-charged Ecotec engine shown here, are able to perform to their greater potential when operated on higher octane fuels. 

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Ethanol's high octane rating may be the ticket for meeting escalating fuel efficiency standards in engines

Thirsty for More

The risks of transporting millions of gallons of flammable ethanol around the country by rail or truck are well-known. Groups like the Emergency Ethanol Response Coalition were formed years ago to educate first responders on best practices for ethanol-related incidents. Accidents are rare, but they do happen. For the 200 or so ethanol plants producing more than 13 billion gallons of fuel annually, however, the risk of injury or incident related to transporting ethanol begins well before the train ever leaves the plant.
A couple of decades ago, railroad carriers typically extended their services to include car movement and track maintenance at private rail yards. But as railways have become busier and more unit trains are used, it&rsquo;s no longer economical for carriers to provide crews to move cars or inspect track on private property. For ethanol plants, this means that plant personnel are now performing railroad duties, usually with little or no safety training. &ldquo;Thirty years ago, the industry didn&rsquo;t do a lot of unit shipments, so it was more advantageous for the railroads to operate within the plant and move the cars for the shipper,&rdquo; says Ken Hay, a retired 37-year veteran of Union Pacific Railroad who spent most of his career as an operations supervisor and who currently serves as a trainer for Rail Safe Training Inc. &ldquo;With more unit trains, the railroads have decided it&rsquo;s easier to drop off the cars and leave the handling up to the shipper. It takes two days to load a unit shipment, so it&rsquo;s unfeasible for a railroad to have a crew there to move cars one at a time. So, the ethanol plant takes the responsibility.&rdquo;
Without some type of safety training, this practice invites mishaps. Addressing the fact that most ethanol plant employees possess agriculture-related skills as opposed to railroad experience, one industry observer jokes that the job of moving railcars at ethanol plants often gets doled out to the employee who has driven the biggest tractor. But a fully loaded, 130-ton tank car is no joke. It is a unique beast that demands its handlers have at least basic safety knowledge.
The founders of Sioux City, Iowa-based Rail Safe Training created their company several years ago specifically for that reason. A group of long-time railroaders with first-hand knowledge of the dangers posed to ethanol plants and other industries operating private rail yards began to become concerned that, without an opportunity for safety education, it would be only a matter of time before a major incident occurred at one of the country&rsquo;s ethanol plants. They contacted Brian McNaughton, who contributed a career&rsquo;s worth of curriculum development experience to the project. Using Class 1 railroad rules and regulations as a base, the company&rsquo;s founders developed a basic education curriculum about the hazards and procedures needed to operate a rail yard safely.
To date, Rail Safe has provided safety training to about a dozen ethanol companies, several of which operate multiple production facilities. Originally a three-day program, Rail Safe has condensed the training into a one-day course because when ethanol plants are running at full capacity, producers can find it impossible to replace employees for several days. The company is considering offering online training, which would allow plant personnel to complete the training at a more flexible pace.
For first-time participants, the training course begins with a consultation to identify the plant&rsquo;s &ldquo;pain points,&rdquo; or specific areas of difficulty within the yard operations. &ldquo;We try to target the training to the needs of the plant,&rdquo; McNaughton says. &ldquo;Some things almost always need to be addressed at every plant, but you need to hit the target of the customer.&rdquo; Once the focus of training is identified, a curriculum is designed and plant employees are treated to a four-hour educational course followed by a hands-on demonstration of procedures introduced during training. Some plants sign on for annual safety courses, typically four hours in length, to refresh existing employee skills and train new hires. &ldquo;Continuous improvement is our goal,&rdquo; McNaughton says. Areas for Improvement Two of the most common mistakes made in rail yards by nonrailroad personnel, according to Rail Safe experts, include failing to set hand brakes on rail cars and &ldquo;shoving,&rdquo; which is the railroad equivalent of backing up a vehicle without first checking the blind spot for obstacles. Both of these mistakes are easily preventable, but without proper safety training, personnel may simply not know the risks they are taking. Bill Fry, a Rail Safe consultant with more than 40 years experience at Burlington Northern Sante Fe, points out that railroad employees are required to take extensive training before they are allowed on-to the tracks, but private industries are not required to subject their employees to any type of rail training. &ldquo;Private industries are trying to run a business and a railroad,&rdquo; he says. &ldquo;It takes a lot of learning and care to do that extra stuff every day. Are they going to have more accidents if they don&rsquo;t [expose employees to training]? Probably.&rdquo;
Hay says he has spotted a handbrake error at every ethanol plant he&rsquo;s visited, but stresses it&rsquo;s not necessarily due to negligence on the part of the plant personnel. More likely, they simply don&rsquo;t know any better. To be fair, he also often notes a failure by trained railroaders to engage handbrakes on rail cars as well. Hay believes this simple step often gets overlooked because cars appear harmless when they&rsquo;re motionless on the track. But McNaughton points to two incidents at ethanol plants that could have been avoided had the employees set the handbrakes. In one scenario, a lone car rolled out of the plant&rsquo;s rail yard and onto the main line where it derailed. Fortunately, the rogue car did not collide with other cars on the track, but the derailment still forced a temporary shutdown of the ethanol plant. Another, more extreme, situation involved multiple cars parked at the top of a small hill and left for the evening. Overnight, wind speeds increased enough to nudge the cars down the hill, where they eventually derailed, ruining a portion of the track and causing hundreds of thousands of dollars in damages.
Neither of those real-life examples resulted in human injury or death but in a worst-case scenario, a slow-moving rail car could easily kill a person. A little-known component of rail liability, according to Rail Safe experts, is that even if an injury or death does not occur on private property, a railroad carrier can, and will, sue a company for assistance in compensating a railroad employee for damages received as a result of a private company error. &ldquo;It&rsquo;s amazing how at risk you are,&rdquo; McNaughton says. Ethanol plants function on thin margins and the cost of a voluntary training course may not immediately appear to be money well spent, but if it prevents an incident from occurring, the training is worth its weight in gold, according to McNaughton. &ldquo;Just getting a crane to upright a tipped car costs twice as much as the training,&rdquo; he says. &ldquo;If the car is damaged, it&rsquo;s even more expensive.&rdquo;
Another area now overlooked by railroad carriers, but which carries dire consequences for the ethanol plant, is the track itself. Some railroads still offer occasional track inspections, but not all. Rail Safe includes track inspections in its services, which means someone physically walks every inch of track on the property. Fry and Hay say that railroad tracks at ethanol plants are generally in very good condition because they are relatively new. Railroad tracks can typically withstand heavy use for 50 years, so unless something has happened to jeopardize the integrity of the track, the chance of identifying a major issue is low. But minor problems such as missing or loose bolts or switches in need of recalibration can also be detected during track inspections and fixed before becoming a major problem. Willing Students To the ethanol industry&rsquo;s credit, although many regulations and compliance measures have been placed on the producers&rsquo; backs, the industry overall still appears willing to take additional measures to ensure it is operating safely and efficiently. Fry says that in his experience, he finds ethanol plant personnel to be friendly and accepting of the training. &ldquo;They all know they need something,&rdquo; he says. &ldquo;They don&rsquo;t always know what it is, but they know they need something.&rdquo;&nbsp; Hay agrees and says feedback from the training he&rsquo;s conducted has been positive. &ldquo;A lot of what I get is: &lsquo;Wow, I never thought of that,&rsquo;&rdquo; he says.
McNaughton says the best compliment his company receives is a change in employees&rsquo; behavior after attending their safety course. &ldquo;You can train people all you want, but they go back out to their job and they do it the way they&rsquo;ve always done it &hellip; so to notice a change in behavior means they have become more aware of the situation.&rdquo;&nbsp; Author: Kris Bevill Associate Editor, Ethanol Producer Magazine (701) 540-6846 kbevill@bbiinternational.com

2012/02/13299235838972.jpg

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A 130-ton tank car is a unique beast that demands its handlers have proper safety knowledge  

Training for Trains

1. Interstates Companies has promoted Jaron Vande Hoef to a senior project manager, principal, with Interstates Engineering. In addition to project management, he is the point person on Interstates Engineering&rsquo;s manpower planning efforts, and shares business development responsibilities. &ldquo;Jaron has successfully led many of our complex projects,&rdquo; said Interstates Engineering President Doug Post. &ldquo;He has been instrumental in ramping up our project-level sales efforts and has regularly been the first to implement change initiatives through his projects.&rdquo; 2. Inbicon A/S has certified Harris Group Inc. as meeting all quality, reliability and professional standards necessary for engineering projects involving Inbicon Biomass Refineries. Because Harris provides multiple engineering disciplines, it can handle every aspect of front-end and detail engineering, says Inbicon&rsquo;s marketing manager Christian Morgen. Its experience in the power industry, pulp and paper projects and renewable energy are relevant as Inbicon&rsquo;s cellulosic ethanol technology is deployed in North America. Inbicon has operated its $100 million biomass refinery in Kalundborg, Denmark, since 2010.&nbsp; 3. The European project, Biocore, has announced the successful pilot scale production of ethanol from wheat straw. In the project, CIMV SA converted wheat straw into its main components at its pilot family in Pomacle, Marne, France, and supplied DSM Bio-based Products &amp; Services BV with refined cellulose.&nbsp; Using proprietary thermostable enzymes, DSM converted the cellulose into glucose, which was fermented into ethanol. In a final step, Arkema SA will use the ethanol to produce ethylene, a precursor of PVC. 4. Tenaska BioFuels LLC and NEDAK Ethanol LLC have entered into a seven-year asset management agreement that will provide working capital and risk management services to NEDAK&rsquo;s 44 MMgy ethanol production facility near Atkinson, Neb. Tenaska will purchase corn and natural gas and market the plant&rsquo;s ethanol and distillers grains. Tenaska has worked with NEDAK since October 2010. &ldquo;This [agreement] is a positive step in the right direction for NEDAK,&rdquo; said Jerome Fagerland, NEDAK general manager. &ldquo;The company has been through challenging times, along with the rest of the ethanol industry, since the second quarter of 2010. We are looking forward to working with Tenaska BioFuels, which has the financial wherewithal to manage through volatile commodity markets and assist us in maintaining a balanced physical or financial grind margin. The agreement will enable us to take advantage of favorable forward grind margins as the market allows them, which will help NEDAK to improve its financial liquidity and reduce debt.&rdquo; 5. Praj Industries Ltd. has acquired a majority stake in Neela Systems Ltd., a Mumbai, India-based water treatment and modular process system company focused on the biotech, pharma, life sciences and cosmetics industries. &ldquo;Praj was scouting for acquisitions in the area of water and wastewater treatment since it entered the space in early 2010. Neela is a good fit as it addresses areas wherein Praj wants to build a stronger presence, globally,&rdquo; said Pramod Chaudhari, chairman, Praj Industries.&nbsp;&nbsp;&nbsp;
6. P4 Consulting announced a front line supervision program designed for ethanol plant lead operators, supervisors and production managers. The aim of the supervisor training program is to increase productivity, accountability and engagement of front line employees. A front line that requires less supervision frees up managers to implement efficiencies, innovate, and spend more time on value-added activities. The program includes a three-day training session in Colorado followed by individual coaching and webinar followup lessons. 7. The Advanced Ethanol Council welcomed two new members, Beta Renewables and ZeaChem Inc. Beta Renewables is a joint venture formed from the Chemtex division of Gruppo Mossi &amp; Ghisolfi and TPG. Its cellulosic ethanol facility in Crescentino, Italy, is expected to be completed later this year. ZeaChem announced in January that it has completed the core construction on its demonstration-scale facility in Boardman, Ore. Other companies on the council include Abengoa Bioenergy Corp., BlueFire Renewables Inc., Coskata Inc., Enerkem Inc., Fulcrum BioEnergy Inc., Inbicon A/S, Iogen Corp., Osage BioEnergy and Qteros Inc.&nbsp; 8. BBI International and NEAtech LLC have announced a joint venture to develop a new international consulting service called BBI Consulting Services. By combining their experience and BBI International&rsquo;s broadcast spectrum, the new venture will have the ability to offer a breadth of bioenergy consulting to companies and organizations worldwide, as well as state and federal departments in the United States. Leading the consulting group are two experienced bioenergy consultants, Rafael Nieves, CEO, and Mark Yancey.
&nbsp;
*** In a roundup of news headlines of the past month: Biobutanol developer butylfuel Inc. has a new name, Green Biologics Inc., after merging with U.K.-based Green Biologics Ltd.&nbsp;
*** Poet LLC has dropped its U.S. DOE loan guarantee and partnered with Royal DSM on the buildout of Project Liberty, which will hold a formal&nbsp; groundbreaking March 13 for the 20 MMgy cellulosic ethanol plant at Emmetsburg, Iowa.
*** Fiberight LLC received a conditional commitment on a $25 million USDA loan guarantee for its cellulosic ethanol facility planned for Blairstown, Iowa. Fiberight is partnering with Novozymes A/S on the conversion technology.&nbsp;
*** Kansas 6 MMgy ethanol producer MGP Ingredients Inc. is teaming up with four Kansas universities and the Kansas Alliance for Biorefining and Bioenergy to develop biobased products such as foams, plastics and fuels from distillers dried grains with solubles.&nbsp;
*** Mascoma Corp. is planning to first apply its proprietary consolidated bioprocessing technology platform in the corn-ethanol industry, offering a genetically-modified yeast that alleviates the need for most of the enzymes currently used. The company has signed agreements with ICM Inc., Lallemand Ethanol Technology and Valero Renewable Fuels Company LLC, as part of the commercialization strategy.&nbsp;
*** Chippewa Valley Ethanol Plant Co. LLLP will receive a $500,000 grant from the American Recovery and Reinvestment Act funds to help with a $2 million project to recover waste heat from the plant&rsquo;s regenerative thermal oxidizer.&nbsp;
*** Green Plains Grain Co., a wholly-owned subsidiary of Green Plains Renewable Energy Inc., is expanding its grain storage by 1.9 million bushels in an agreement with JW Grain, St. Edward, Neb., about 40 miles from Green Plain&rsquo;s 100 MMgy Central City ethanol plant.
Share your industry briefs To be included in Business Briefs, send information (including photos and logos if available) to: Business Briefs, Ethanol Producer Magazine, 308 Second Ave. N., Suite 304, Grand Forks ND 58203. You may also fax information to (701) 746-8385, or e-mail it to sretkaschill@bbiinternational.com. Please include your name and telephone number in all correspondence.

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Jaron Vande Hoef joined Interstates in 2002. His industry project experience includes ethanol, biodiesel, energy management, feed and grain, pet food and others. He has written articles for both Ethanol Producer Magazine and Feedstuffs. 

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Business Briefs

The basic message of 2011 was simple: If E15 is good enough for NASCAR racecars, it&rsquo;s good enough for street cars too.&nbsp;
Backing up that message is the fact that NASCAR made no changes to the engines and very few changes to the vehicles overall to prepare for its switch from unleaded gasoline to E15, says Mike Lynch, director of green innovation for NASCAR. The only change to NASCAR racecars from 2010 to 2011 was a new fuel cell. Basically, racecars don&rsquo;t have a hard gas tank like passenger cars&mdash;they use a bag supported by a structure. As a precaution, this container was swapped out for an alcohol-compatible component. &ldquo;That&rsquo;s not an engine performance component at all, it&rsquo;s literally the gas tank,&rdquo; he says. &ldquo;Otherwise, under the hood, we were all good with where we were before.&rdquo;
The decision to make no changes was based on extensive testing over about a year and a half. NASCAR first tested E15 in engines on a dynamometer (dyno) at multiple engine shops on Dodge, Chevy, Ford and Toyota engines. Next, drivers put E15 through its paces during thousands of miles of performance and endurance testing on racetracks. Every test was double-and triple-checked to make absolutely certain nothing would go wrong before NASCAR committed to making the switch to E15, Lynch says, adding that testing wrapped up right before the October 2010 announcement that NASCAR and American Ethanol were entering into a three-year partnership, including the switch to E15.
Looking back on a year of more than a million miles fueled by E15, NASCAR couldn&rsquo;t be happier, Lynch tells EPM. Thanks to ethanol, racecar drivers saw a 5 to 10 percent increase in horsepower, depending on the race and the conditions. And, although critics often gleefully point to the fact that ethanol has one-third the energy density of gasoline, NASCAR really didn&rsquo;t see a big loss in mileage, Lynch adds, saying the decrease wasn&rsquo;t anything of note.&nbsp; &ldquo;One of the things that makes it conducive to ethanol, without any adjustment whatsoever, is the higher compression ratio than would be typical for any street car,&rdquo; he says. &ldquo;It&rsquo;s a 12 to 1 compression ratio, which is really key to taking advantage of the higher octane characteristics of ethanol and an ethanol blend.&rdquo;
NASCAR is proud to have American Ethanol as partnership and proud to help spread the positive message about ethanol&rsquo;s impact to jobs and energy independence, Lynch says. &ldquo;Everyone in NASCAR leadership couldn&rsquo;t be more passionately on board with this partnership.&nbsp; NASCAR green is here to stay and American ethanol as a part of it is here to stay as part of it for the long term.&rdquo;
It&rsquo;s a message NASCAR fans have strongly identified with too. Known for their loyalty to the sport, which includes brand loyalty to the logos displayed everywhere&mdash;on the cars, on driver clothing and around the track&mdash;NASCAR fans are showing signs of supporting ethanol in increasing numbers. That was proven in the results of NASCAR research to gauge changing attitudes about ethanol and the environment. &ldquo;American ethanol&mdash;so corn ethanol&mdash;is good for the environment, it serves the environment, it contributes to major job creation in the U.S., and helps us strengthen our energy independence,&rdquo; Lynch says. &ldquo;On those three points, our fans definitely understand that.&rdquo;
Three years ago, the result of the research was nearly identical for both fans and nonfans. Follow-up research released at the end of 2011 showed a radical shift, with NASCAR fans showing much greater support for environmentally responsible behavior and ethanol. Lynch credits NASCAR&rsquo;s focus on making the sport greener, including the switch to E15, for this shift. &ldquo;They know&mdash;and this is a trust that has been earned over 60 years in the sport&mdash;that NASCAR would never introduce something that we haven&rsquo;t done our homework on and didn&rsquo;t believe was the right thing to do for a number of reasons, including for our country,&rdquo; he says.
Of course, NASCAR isn&rsquo;t the only place people are hearing the environmentally friendly message. It can be found in many places, such as children&rsquo;s movies and the green efforts of some large corporations. Lynch asserts, however, that NASCAR and NASCAR fans are taking it even further. &ldquo;With the sport going in a green direction and ethanol being a major aspect of that, fans are going with it too,&rdquo; he says. &ldquo;The thing is that they are going to it to a much greater degree than nonfans.&rdquo;
That&rsquo;s not a small thing, considering that 20 percent of the U.S. population identifies themselves, on some level, as fans of the sport. That adds up to more than 65 million people. Avid fans make up about 20 percent of that group, about 12 to 15 million people. &ldquo;Our fan base is absolutely enormous,&rdquo; he says. &ldquo;So when you talk about fans versus nonfans, and our fans moving in a direction, you are talking about a massive number of people having the benefit of fact-based education and exposure about what we are doing.&rdquo; Author: Holly Jessen Associate Editor of Ethanol Producer Magazine (701) 738-4946 hjessen@bbiinternational.com
&nbsp;
===============================
Transition to Fuel Injection Since the 1980s, most car engines have used fuel injection. Not so for NASCAR racecars, which have used carburetors since 1949. This season, all Sprint Cup Series race cars will have transitioned to fuel injection&mdash;a technology NASCAR says will work well with E15. &ldquo;Fuel injection is just going to make it an even stronger story,&rdquo; Lynch tells EPM.
Fuel Injection means maximal performance for minimum fuel use. It also works hand-in-hand with E15 to reduce greenhouse gas and particulate emissions. &ldquo;You get the best intersection of performance and environmental friendliness that you can get, in terms of the current state-of-the art engines,&rdquo; he says. &ldquo;We&rsquo;re expecting fuel injection to be great actually for E15 and the data on that will roll out over the year.&rdquo;
NASCAR has three partners in rolling out fuel injection&mdash;McLaren Electronic Systems, Freescale Semiconductor and Bosch.&nbsp; Basically, says Steve Nelson, Freescale&rsquo;s director of marketing for the Americas, it&rsquo;s about bringing electronics into NASCAR racecars. While some might wonder why this wasn&rsquo;t done years ago, the truth is carburetor technology worked just fine in the past. &ldquo;A racecar is a very rarified beast,&rdquo; he says. &ldquo;It does one thing&mdash;it wants to go fast&mdash;and anything that doesn&rsquo;t help it do that, it&rsquo;s not interested in. It&rsquo;s not worried about air conditioning, it&rsquo;s not worried about the radio.&rdquo;
Computerized fuel injection will allow for rapid and real-time adjustments that will add up to reductions in emissions and increased fuel efficiency. &ldquo;The more electronics you put in, the more control you have,&rdquo; he says. On the fuel-efficiency side, it&rsquo;s hard to give exact numbers. Carburetors are efficient enough when a racecar is running full out, especially on a long track, Nelson says. Fuel-efficiency gains will be most noticeable on shorter tracks.&nbsp;
With fuel injection, fans won&rsquo;t see spurts of flame shooting out of the exhaust when drivers lift off the throttle, especially when they enter the pit area. While the flames may look exciting, it&rsquo;s a signal of inefficiency. &ldquo;Air is still flowing at a very high rate through the engine, so what it is doing is pulling gas through the engine, and that&rsquo;s unburned gasoline that&rsquo;s coming out at the exhaust pipe,&rdquo; he says, adding that with fuel injection, fuel flow stops instantly as drivers lift off throttle. All this fits in well with NASCAR&rsquo;s greener image, of which ethanol is a major part. &ldquo;The fuel injection will help reinforce that green message,&rdquo; Nelson says. &ldquo;At the end of the day it&rsquo;s motor sports&mdash;burn the fuel, win the race&mdash;and yet, this is another piece of that tie-in.&rdquo;
Second, fuel injection will help connect racecars with the passenger vehicles fans drive every day. &ldquo;The customer sees ethanol at the pump, they see ethanol at the track, and now they see fuel injection at the track,&rdquo; he says, adding that the electronics in NASCAR Sprint Cup Series racecars are the same as the ones that go into passenger cars.

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Austin Dillon, a 2012 spokesperson for American Ethanol, sits in a NASCAR racecar. 

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Clint Bowyer drove the No. 33 Chevrolet car in 2011 and was a spokesperson for American Ethanol. This year drivers Kenny Wallace and Austin Dillon will serve as spokesmen for American Ethanol. Wallace served in the same role last year as well. 

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NASCAR looks back on a year of E15 as the 2012 season kicks off in February

The Fan Connection

New technologies accelerate industry innovation, and this month Ethanol Producer Magazine brings several such developments to the forefront. In our cover story, Associate Editor Kris Bevill reports on recent research on ethanol&rsquo;s octane advantage, which could become the key to unlocking greater fuel efficiency in new engine technologies. Associate Editor Holly Jessen writes about the work of two companies examining new technologies to enhance the age-old core technology of ethanol production&mdash;fermentation.&nbsp; Our contributing writers this month address the same theme from different angles, talking about applying known technologies in new ways like supercritical water or certain metabolic pathways, or applying holistic modeling techniques to optimize cellulosic processes.
Sharp readers may have noticed I borrowed my opening line above from the National Ethanol Conferences&rsquo; theme, &ldquo;Accelerating Industry Innovation.&rdquo; I plan to attend the NEC in Orlando, weather cooperating. (Last year a snowstorm 300 miles away at the Minneapolis airport canceled my flight.) While I&rsquo;ll be intently listening to the speakers and reporting on the conference, I would love to talk with you there during breaks&mdash;get your feedback, pick up a few story ideas and just learn more about the ethanol industry in your corner of the world. Look me up.
Susanne Retka Schill, Editor sretkaschill@bbiinternational.com

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New Technologies

Mansfield Oil Co. has joined forces with global agricultural and energy products supplier Noble Group to create Noble Mansfield Renewable Energy, a joint venture that the companies say will combine their existing marketing abilities to define the next generation of ethanol marketing. The new venture will be headquartered in Bloomington, Minn., where Mansfield&rsquo;s C&amp;N ethanol marketing business is based. Bill Covey, previously the head of Noble Group&rsquo;s ethanol marketing segment, will serve as CEO and Jon Bjornstad, founder of C&amp;N Ethanol Marketing, is president.
&ldquo;The traditional plant marketing approach has to evolve in order to continue to add value for producers in new ways,&rdquo; Bjornstad says. He began marketing renewable fuels years ago and says that the industry has grown to a point where high-speed, automated transactions are an absolute necessity. Mansfield has adapted to meet these needs, investing heavily in developing its renewable identification numbers (RINs) management and compliance services and automating other aspects of the business to lessen workforce requirements and reduce risk. &ldquo;Having systems like this really does separate us from the pack,&rdquo; he says. &ldquo;Today, in an environment where obligated parties are really concerned with risk, there will soon be a short list of counter parties that refiners are willing to do business with. Refiners don&rsquo;t want the risk of noncompliance via nonvalid RINs.&rdquo;
Bjornstad also stresses the strength of Mansfield&rsquo;s ethanol and distillers grains export program as being a benefit to the new partnership, adding that Noble&rsquo;s international presence will compliment Mansfield&rsquo;s previous efforts and help to expand those services to even more markets for their clients.
Covey says Noble brings three key strengths to the new venture: risk management expertise, unmatched financial strength and a history of working relationships with blenders and refiners to market multiple products. &ldquo;Ethanol producers need a financially secure marketer with large operating scale, direct access to global markets, and a full suite of risk management services,&rdquo; he says. &ldquo;This new organization offers plant partners access to unmatched risk management services and a scope of services on a global scale.&rdquo;
Reflecting on the changes in the ethanol industry over the past two decades, Bjornstad says he thinks the venture between Mansfield and Noble serves as a sign of the times. &ldquo;The industry is going to have to consolidate and streamline to enable it to run with the energy sector,&rdquo; he says, adding that the new venture is already prepared for the next step&mdash;marketing new fuels and chemicals produced at biorefineries. &ldquo;As ethanol continues to mature, there will be more innovative ways to produce various products from the plants,&rdquo; he says. &ldquo;Mansfield is already a marketer for Gevo&rsquo;s butanol and we&rsquo;re ready to market other products ethanol producers come up with.&rdquo; &mdash;Kris Bevill

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Marketing firms join to form next generation of ethanol marketing

The Next Level

Naperville, Ill., population 145,000, has found a way to turn sticks and leaves picked up during its annual brush collection into power and fuel for its municipal fleet. The city, which is located 28 miles west of Chicago, is part of a demonstration project to create electricity, hydrogen and ethanol from wood chips. &ldquo;It will become a model for municipalities across the country to use biomass residue to power fleet vehicles,&rdquo; according to information on the city&rsquo;s website. &ldquo;These carbon-neutral fuels are produced from landscape materials which currently cost the city money to remove.&rdquo;
A gasifier developed by Packer Engineering has been installed at Naperville&rsquo;s Green Fuels Depot. It will process about 1 ton of wood chips daily and has the capacity to power 12 to 15 suburban homes. The electricity produced will be used to power the system, supply electricity to the city-owned utility&rsquo;s power grid and power plug-in hybrid vehicles. The system can also divert a portion of the energy produced to make hydrogen for fuel cell vehicles or ethanol for flex-fuel vehicles.
Primary funding for the project is from the U.S. DOE, secured thanks to efforts of U.S. Rep. Judy Biggert, R-Ill. Packer Engineering, a engineering consulting business with multiple research efforts in the alternative energy field, and the city of Naperville are contributing to the project though temporary use of land and buildings as well as manpower. Argonne National Laboratory, which is developing a process to produce ethanol through gasification, is also a partner in the project.
The Green Fuels Depot is expected to create jobs, save money for the city and reduce pollution. Similar systems could be used in cities with 7,000 or more single family dwellings, the city said. &mdash;Holly Jessen

 In Naperville, Ill., hopes are that its demonstration plant producing electricity, hydrogen and ethanol from yard waste will become a model for many cities.  

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Demonstration project produces green energy from yard waste

When the Chips  are Gasified

There&rsquo;s activity again at the biorefinery in Soperton, Ga. LanzaTech&nbsp; purchased the former Range Fuels plant Jan. 3, renaming it the Freedom Pines Biorefinery, although it wasn&rsquo;t yet ready in late January to say when the plant might begin producing ethanol. &ldquo;That&rsquo;s exactly what company engineers are looking at right now,&rdquo; spokesperson John Williams says. &ldquo;They are doing a thorough review of the existing assets and determining the integration pathway. This process is expected to take a few months.&rdquo;
The plant has sat idle since early last year and will need extensive renovations. Just as was planned originally, LanzaTech will utilize the facility to produce ethanol from wood. &ldquo;We plan to leverage some of the existing technology at the facility alongside our own proprietary technology to produce clean, renewable and domestic fuels and chemicals from the bountiful waste biomass in the region,&rdquo; the company said in a press release. LanzaTech&rsquo;s technology converts gases from biomass or waste industrial gases into ethanol and chemicals.
On Jan. 23, LanzaTech announced it had closed on Series C funding with total new investments of $55.8 million that will help advance the Freedom Pines and other Lanza-Tech projects, Williams says. To date, it has raised more than $85 million. Although the company isn&rsquo;t saying exactly how the money will be spent, at least part of it will be used to further develop its core gas fermentation technology, including the company&rsquo;s pilot facility in New Zealand and the Freedom Pines site. &ldquo;It is too early to project our investment, but given that Freedom Pines is a project 100 percent under our control, we consider it a key, strategic asset for us,&rdquo; he says. &ldquo;We will allocate funds accordingly.&rdquo;
The purchase of the Soperton facility isn&rsquo;t the only good news story in Georgia. The only other existing ethanol plant in the state, Southwest Georgia Ethanol LLC, emerged from bankruptcy in early January after operating as a debtor-in-possession for nearly a year. The 100 MMgy corn-ethanol plant is located in Camilla, about 150 miles from the Freedom Pines plant. &mdash;Holly Jessen

Technology developer LanzaTech is the new owner of the former Range Fuels Inc. cellulosic biofuels plant in Soperton, Ga. The facility has been renamed Freedom Pines Biorefinery. 

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Failed Range Fuels plant under evaluation by new owner LanzaTech

Back on  the Horse

The application window for South Dakota&rsquo;s inaugural blender pump grant program may have just opened on Jan. 9, but it already appears that the incentive will be a success. More than half the fiscal year&rsquo;s available funds had been applied for within a couple of weeks of the Ethanol Infrastructure Incentive Program&rsquo;s launch, according to South Dakota&rsquo;s Energy Policy Director Hunter Roberts, leaving little doubt that the entire $950,000 budget would be quickly distributed to future blender pump retail locations.
&ldquo;I&rsquo;m extremely pleased with the activity we&rsquo;ve already seen,&rdquo; Roberts said in late January. &ldquo;We only started accepting applications this month and we have received $515,000 in applications for 15 different stations to install 29 blender pumps. Clearly, we&rsquo;re seeing a lot of positive interest.&rdquo; South Dakota&rsquo;s blender pump program is a five-year, $3.5 million grant program and was initiated by the state&rsquo;s ethanol producers, who volunteered to redirect a portion of the state&rsquo;s Ethanol Producer Payments Program to fund the initiative. Dana Siefkes-Lewis, president of the South Dakota Ethanol Producers Association, says the goal is to increase the availability of ethanol blends, thereby benefiting the state&rsquo;s economy and the ethanol industry. A total of 15 ethanol plants are located in
South Dakota, representing more than 1 billion gallons of annual production capacity, including top U.S. producer, Poet, which has five plants and a research facility in the state.
In early January, representatives from the American Coalition for Ethanol and Growth Energy joined with officials from the state&rsquo;s economic development office to conduct a series of informational meetings for retailers. Rick Serie, director of market development at ACE, and Roberts said feedback from retailers was very positive. Most retailers interested in installing blender pumps say they would do so to gain an edge over their competitors, Serie says. According to ACE, there are currently about 45 blender pump locations in the state and the Governor&rsquo;s Office of Economic Development estimates blender pumps at around 100.
Serie says the GOED should be commended for creating a user-friendly blender pump incentive program. The application form is a mere two pages and is very easy to complete, he says, compared with the USDA&rsquo;s Renewable Energy for America Program application, which stretches to more than 100 pages. &ldquo;That&rsquo;s the key: keep it simple,&rdquo; he says. &ldquo;We think this is going to be a good model for other states to follow.&rdquo;
The majority of the S.D. program&rsquo;s funds will be awarded on a first-come, first-serve basis. The GOED says it will consider the program a success whether it results in many new pump locations or a few locations with many new pumps. Applicants are eligible to receive grants for up to $25,000 for the installation of a station&rsquo;s first blender pump, and up to $10,000 for each additional pump. &mdash;Kris Bevill

Retailers respond positively to SD blender pump incentive

Up and Running

In the months leading up to the expiration of the 45-cent-per-gallon Volumetric Ethanol Excise Tax Credit, E85 retailers warned that their fuel could end up being priced out of the market as they would likely have to raise the price by 38 cents per gallon to compensate for the loss of VEETC. Because E85 gets fewer miles per gallon than conventional gasoline, a price differential is necessary in order for most drivers to justify purchasing the fuel and retailers said that without VEETC, it would be difficult to sell E85. A coalition was formed by concerned retailers and industry supporters to request that Congress extend another portion of the tax code known as the Alternative Fuel Credit and then urge legislators to modify it to allow E85 to qualify for the 50-cent-per-gallon credit. Doing so would essentially replace VEETC&rsquo;s positive price influence on E85 and allow retailers to keep it cost-competitive with gasoline, according to the group.
By the end of January, no Congressional action had been taken on the Alternative Fuels Credit, but the Coalition for E85 was optimistic that Congress would eventually extend it and make it effective retroactively to Jan. 1. Once that hurdle is overcome, the group still faces the challenge of convincing lawmakers to add E85 to the list of applicable fuels. To help achieve that goal, the coalition launched a grassroots information campaign to raise awareness among consumers, offering sample letters to Congress, pump-top posters for retailers to display at their fueling stations and social media site links on its website&mdash;www.coaltionforE85.org.
For retailers who have invested millions of dollars in the installation of E85 infrastructure, the lead-up to the new year no doubt caused justifiable anxiety. However, while the potential for a crushing blow to E85 demand as a result of price hikes is still high, not all retailers were forced to immediately price E85 higher than gasoline. Mike Pearson, manager of California&rsquo;s Pearson Fuels, an alternative fuel retailer who operates about 15 E85 locations in the state, said that in mid-January his company was still selling E85 at $3.49 per gallon compared to $3.59 for gasoline. The company had filled its E85 storage tanks shortly before VEETC expired, which had helped them delay price changes. But, more significantly, the price of ethanol had dropped in recent weeks while the price of gasoline had gone up, he says. &ldquo;We did get one load of ethanol after the first of the year, and the price was substantially lower,&rdquo; he says. &ldquo;If the tax credit were still there, we would be selling a ton of E85 because we&rsquo;d be able to sell it for 38 cents less than we&rsquo;re selling it now. But we just don&rsquo;t sell much E85 when it&rsquo;s only a 10-cent difference.&rdquo;
Robert Wisner, professor emeritus and biofuels economist at Iowa State University, says when considering E15&rsquo;s slow entry into the market, E85 is the industry&rsquo;s best current chance to beat the blend wall. But he also predicts that the loss of VEETC will raise E85 prices substantially, which could have damaging results. &ldquo;It [E85] was already limited by the number of flex-fuel vehicles, by prices that generally were not fully competitive and by lack of retail outlets,&rdquo; he says. &ldquo;It&rsquo;s one more negative that has come down on the E85 market.&rdquo;
It is possible that E85 prices may remain somewhat competitive for the short-term, but for that to happen ethanol prices would need to stay low&mdash;not ideal for ethanol producers&mdash;and gas prices would need to stay high. In mid-January, Wisner noted that ethanol futures and gasoline futures were predicting ethanol at an approximate 45-cent discount to gasoline, which he interpreted as a signal that the market was attempting to adjust for the loss of VEETC. Bloated supply stocks at the end of the year also likely contributed to the drop in ethanol prices.
Lewis believes high gas prices have also helped mask the issue with E85 prices, but he expects oil prices to come down eventually, and that will spell trouble for E85 prices. &ldquo;It doesn&rsquo;t matter what E85 costs; it matters what gasoline costs versus E85,&rdquo; he says. &ldquo;We could have a 50-cent price increase tomorrow and nobody would care, as long as we had a 50-cent price increase for gas at the same time. If we had to raise our price of E85 38 cents a gallon, we&rsquo;d have people complaining all day. But mostly people complain with their pocketbook. They just don&rsquo;t come or they buy gas instead.&rdquo; &mdash;Kris Bevill

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Pain at  the Pump

Understood since man first made beer, fermentation is an age-old process that has been developed to the point where it&rsquo;s nearly impossible to improve on the efficiency of the process. &ldquo;It&rsquo;s maxed out,&rdquo; says Garth Likes, CEO and chairman of Syngar Technologies Inc. That&rsquo;s why many biofuels companies are focusing elsewhere&mdash;such as feedstock development, more easily digested cellulose, pretreatment processes or gasification, to name a few.&nbsp; Syngar, however, is tackling the basic building block of fermentation itself. &ldquo;Everybody else is off trying to solve the problem from different angles,&rdquo; he says, &ldquo;we have just been able to bring a very simple engineering technology process to the fermentation procedure and improve it.&rdquo;
A technology in the precommercial phase by the Edmonton, Alberta, company has the potential to increase biofuel fermentation yields by 33 to 60 percent. The Pulsed Low Ultra Sound Wave, a patent pending technology trademarked as PLUSWave, utilizes ultrasound waves. Applied at specific frequencies and power levels at timed intervals, it stimulates organism growth through cell division and protein synthesis. &ldquo;It&rsquo;s sort of like, one plus one equals three,&rdquo; Likes says. &ldquo;We are increasing the growth curve of the organism so that it eats faster, it chews faster, it converts faster.&rdquo;
Although it&rsquo;s not yet known exactly how it works, he likens it to the body&rsquo;s response to a cut. Signals immediately go out stimulating blood clotting and growth to heal the skin. &ldquo;I think that what&rsquo;s happening with the ultrasound is that we&rsquo;re simulating growth responses within the organism because of this irritation, I&rsquo;ll call it, from the sound wave frequencies,&rdquo; he says. &ldquo;And so in the process of growing and responding to enhanced growth, we&rsquo;re also creating extra proteins or enzymes within the organism as part of the growth cycle.&rdquo; He adds that research has shown the increase in yield is stimulated by the ultrasound waves, and is not only due to mixing.
Although the technology may have other applications, such as in the medical field, Syngar is first focusing its energy on the ethanol and biodiesel industries. The company is working toward licensing the technology for an upfront fee of $100,000 for manufacture and installation, plus a royalty based on the increase in gallons produced. Currently, it has teamed up with two other companies, one U.S. and one Canadian, on small-scale ventures and is looking for other partners to help bring it to commercial scale. For traditional grain-based ethanol plants, PLUSWave would mean a retrofit to existing equipment. It also works in the conversion of cellulosic materials to ethanol. &ldquo;It&rsquo;s not just a one specific technology to a one specific type of organism, it&rsquo;s a very broadband, wide platform approach,&rdquo; he says.
During cellulose degradation by the fungus Trichoderma reesei, PLUSWave increases the production of fermentable sugars by 40 percent. In the next step, it increases the ability of the yeast Saccharomyces cerevisiae to ferment sugars to ethanol by 20 percent. In all, the company estimates it could reduce cellulose conversion costs to 1.2 cents per liter. Once the company has a handle on that, there are plans to research a consolidated cellulosic production process that would combine the hydrolysis and fermentation into one step, which would further decrease costs. &ldquo;It not only increases its growth rate and its budding rate, but it produces more cellulase enzymes, which will directly act on the cellulose to convert into sugars,&rdquo; he says. &ldquo;We are quite optimistic with our data showing us that we would have a viable process of being able to put cellulose materials into a bioreactor, convert it to an end product sugar and then add the yeast to do the fermentation so that in a one-step consolidated process you could have cellulose to ethanol.&rdquo;
To commercialize PLUSWave, Syngar needs to solve the technical problem of how to achieve uniform dispersion of ultrasound waves through a large fermentation vessel. It works in the lab with small volumes, Likes says, comparing it to achieving water jiggle in a glass on a desk to jiggling the water an office-sized tank. &ldquo;How do we disperse the sound waves through whatever volumes we are working with in order to get the maximum dispersal of sound waves through that entire volume so that all the organisms, etcetera, can be affected by the PLUSWave?&rdquo; he asks. &ldquo;We know that once they are exposed to the PLUSWave, the effect is always the same, which is the stimulation of growth and the stimulation of enzyme production. Once we have that worked out from an engineering perspective, we will be ready for our commercial launch.&rdquo;
Of course, the timeline also depends on money.&nbsp; Syngar is working towards going public, Likes said, estimating it could receive upwards of $10 million in financing, if successful. &ldquo;That will allow us to move things forward,&rdquo; he says. &ldquo;Based on what I see right now, I&rsquo;d say probably in 12 months we would be ready to be commercially offering licenses with all of the proof and all of the data and all of the expertise so it becomes a turn-key operation.&rdquo; Firm Optimization Even as novel technologies such as the PlusWave are being developed, other companies continue to build on existing antibacterial and yeast products. Ferm Solutions Inc. has an arsenal of such products, and is in the research and development phase on multiple others. &ldquo;We&rsquo;re very focused on reducing costs and at the same time increasing performance through optimization and improved products and processes,&rdquo; says Shane Baker, president and CEO. &ldquo;We hope to bring several of those to commercialization by this year.&rdquo;
The company plans to break ground in February on a $1 million expansion to its Danville, Ky., facility, which it hopes will be completed by midyear. The goal is to add more space for laboratory research and for its advanced training programs for ethanol personnel, Baker says. In exchange for $100,000 in forgivable loans and grants from state and local government, Ferm Solutions has committed to adding five new high-tech jobs to the current 20. &ldquo;In addition to in-house laboratory and research support services, we also have an extensive collaborative network with different academic and industrial institutions,&rdquo; says Patrick Heist, chief scientific officer.
The company has a history of working with the grain-based ethanol industry with its FermGuard and FermPro products. In the advanced biofuels arena, Ferm Solutions has helped clients develop new methods for producing ethanol from everything from sweet sorghum, potatoes, waste streams from candy manufacturing and expired beverages, to name a few. Although its core competency remains serving the ethanol industry, research has identified fermentation applications for the food industry and bacterial control methods for the medical field. &ldquo;It is possible that this could not only expand into second-generation biofuel production, but also into other industries as well,&rdquo; Heist says, adding that diversification has the potential to make the company stronger.
New nonantibiotic bacterial control products are in the later stages of research and development at Ferm Solutions. Using natural products, such as extracts from plants, fungi, insects and other living organisms, the team is mining for chemicals that could be used to control bacterial contamination at ethanol plants, Heist says. These chemicals would be less likely to pose regulatory issues for the ethanol industry because they aren&rsquo;t used for treatment of human disease.
The company&rsquo;s own antibacterial product, FermGuard, is a well-known, safe product for solving bacterial problems at ethanol plants, Heist says. Based on their own studies of the issue, Heist believes any residual antibiotics in distillers grains are at safe levels and may not even be biologically active. However, it&rsquo;s still a good area for continued study. &ldquo;We are looking to the future, in case there was some type of a problem with antibiotics, which I don&rsquo;t foresee, then we have alternatives,&rdquo; he says.
Research is also being conducted on the possibility of controlling bacterial contamination on the molecular level. &ldquo;We&rsquo;re actually looking at how bacteria communicate with each other and so using various self-signaling pathways, we can create signals that may tell a bacteria, &lsquo;Hey, this is not a good place to live and reproduce,&rsquo;&rdquo; he tells EPM.
Thanks to assistance through academic and industrial collaborations, Ferm Solutions is also conducting basic scientific research to better understand the dynamics of bacterial contamination in the ethanol production process. That&rsquo;s the foundation for understanding how to fix the problem. &ldquo;Before you come up with a control strategy, you really have to understand what you are trying to control,&rdquo; he says. &ldquo;In the case of bacteria that affect ethanol plants, in the grand scheme of things, it&rsquo;s a highly understudied area.&rdquo;
Work is also under way to create new yeast strains from a repository of more than 200 strains collected from mostly natural habitats. The team is evaluating the strains for beneficial characteristics, such as improved stress and temperature tolerance, sensitivity to organic acids, ability to utilize multiple sugar sources and the addition of nutritional value to distillers grains. Once that process is complete, Ferm Solutions will work to mix and match the positive attributes among yeast strains through genetic modification or traditional breeding strategies. Other technologies, such as corn oil extraction methods and enzymes, are also under investigation. Author: Holly Jessen Associate Editor, Ethanol Producer Magazine (701) 738-4946 hjessen@bbiinternational.com

Brian King, lab manager of the natural science department of Ferm Solutions, works in the lab at the company, which has libraries of more than 200 yeast and 2,000 bacteria samples for use in its research and development. 

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A contaminated plate shows bacterial growth from a sample of fermented mash. 

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Organisms are kept in suspension at 80 degrees below zero Celsius in a cryogenics freezer in the Ferm Solutions natural science department.

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Two companies develop new technologies aimed at revolutionizing fermentation

Taking Fermentation to a New Level

Given the steady stream of adaptations and advancements made by ethanol producers just since the renewable fuel standard was updated in 2007, attempting to pinpoint one 12-month period as particularly transformational could be futile. Consider, however, the nonexistence of a blenders tax credit for the first time in 30 years, combined with an industry at a blendwall, and it doesn&rsquo;t take much crystal ball gazing to predict that 2012 could be the turning point&mdash;the year the industry begins to transform into its future self.
Diversification has been a topic of interest for some time now, but this is the year producers need to move toward incorporating alternative revenue streams into their operations. High on the list of contenders is biobutanol. It offers producers the opportunity to squeeze another product out of existing corn-ethanol facilities or to entirely convert their operations to produce a fuel with chemical and transportation applications. It&rsquo;s not likely to push ethanol out of the transportation fuels market anytime soon, if ever, but it has potential as a gasoline additive or in the chemicals market. Several companies poised to aggressively court the ethanol industry this year say the time is right for ethanol producers to welcome this four-carbon fuel into their stable and transform their facilities from ethanol plants to advanced fuel biorefineries. Playing Host Rather than building free-standing facilities, several biobutanol companies would prefer to piggyback on the existing infrastructure, workforce and feedstocks offered by ethanol producers.
The BP and DuPont joint venture, Butamax Advanced Biofuels LLC, has formed an Early Adopters Group for existing ethanol producers who sign on to collaborate on isobutanol retrofits. Its first taker was Lamberton, Minn.,-based Highwater Ethanol LLC, which signed a letter of intent in December to potentially retrofit its 50 MMgy corn ethanol plant. Calling biobutanol &ldquo;the next step in biofuels,&rdquo; Highwater CEO Brian Kletscher said shortly after the announcement that butanol has the potential to be a drop-in fuel that can be utilized nationwide and will allow Highwater to remain a leader in renewable fuels production. His company signed with Butamax because it offers new technology and the engineering resources necessary to complete retrofit operations, Kletcher said. It will be 2013 before retrofitting begins, but Butamax suggests it could produce at a commercial scale in 2014.
Colorado-based Gevo Inc. has partnered with ethanol engineering masters ICM Inc. to also take the total retrofit approach. Gevo expects to begin producing isobutanol this summer from a 22 MMgy corn-ethanol plant in Luverne, Minn., purchased in 2010. Once the retrofit is complete, the facility will have a butanol capacity of 18 MMgy, but isn&rsquo;t expected to approach full-scale production until the second half of this year. Gevo has also signed a joint development agreement with South Dakota&rsquo;s 50 MMgy Redfield Energy LLC and is retrofitting that facility to produce 38 MMgy of isobutanol when complete. Gevo anticipates beginning production there sometime in 2013.
U.S.-based Green Biologics Inc., the newly announced merger between Ohio&rsquo;s butylfuel Inc. and UK-based industrial biotechnology company Green Biologics Ltd., is taking a slightly different approach to the ethanol-butanol relationship. It is seeking to partner with ethanol producers to either retrofit their plants or to bolt its n-butanol production capabilities onto existing facilities. The company had not yet announced ethanol partners as of late January but Joel Stone, president, North American, and global vice president of engineering, says several ethanol producers have shown a &ldquo;high degree of interest&rdquo; in the concept because it would allow ethanol production throughout the bolt-on process, rather than requiring a temporary shutdown for retrofits. Ethanol producers will be allowed to determine what amount of ethanol and butanol output they would like from the finished plant. For example, a 100 MMgy ethanol plant could choose to produce 90 MMgy of ethanol and divert between 10 and 20 percent of its corn intake to the butanol stream, lessening pressure on the ethanol blendwall and adding diversity to the plant&rsquo;s revenue streams, he says.
The co-located butanol facility would license Green Biologics&rsquo; technology, which Green Biologics would own, operate and serve as marketer. Stone says that is another benefit for ethanol producers if they participate as an investor. They don&rsquo;t have to learn a new market or product; they&rsquo;d be required only to supply feedstock and serve as the host facility. Green Biologics is also exploring building its own facilities, but Stone says they will be aggressively courting ethanol producers to host butanol facilities first. Plus Side Developers are more than willing to share the benefits of butanol compared to ethanol. While the ethanol industry is still struggling to make E15 legally available for sale, butanol can currently be blended at up to 12.5 percent by volume. At this level, it is defined under the Clean Air Act as being &ldquo;substantially similar&rdquo; to gasoline, which means it can be used in gasoline infrastructure, including pipelines and retail dispensers, without modifications. Additionally, because the Energy Independence and Security Act of 2007 declared that isobutanol has 30 percent more energy than ethanol, producers generate 1.3 renewable identification numbers (RINs) per gallon of isobutanol compared to 1 RIN per gallon of ethanol.
One of ethanol&rsquo;s most well-known, albeit not insurmountable, flaws is its affinity for water. This phase separation issue is nonexistent for butanol, according to companies like Gevo, which, in a white paper addressing many of the differences between the two fuels, stated that butanol acts more like a hydrocarbon when introduced to water in a fuel blend, thereby avoiding any dilution of the gasoline&rsquo;s octane and reducing or entirely eliminating any operational issues related to water content.
What&rsquo;s the Catch? For all of its benefits, there are also multiple issues left to be resolved before butanol can stake its claim as being a widely used gasoline additive. For example, as ethanol producers know, the U.S. EPA allows fuel containing 9 to 10 percent ethanol to exceed the 9.0 psi Reid vapor pressure (RVP) limit by 1 pound during summer months. Because the waiver strictly applies only to E9 or E10 blends, if butanol-blended fuel were to be added to a storage tank containing E10 in the summer months, diluting the overall ethanol content to less than E9, the fuel would violate EPA regulations if the RVP is greater than 9.0 psi. This puts would-be suppliers of butanol blends at a disadvantage because they would likely need to store that fuel and ethanol-blended fuel in separate tanks in order to avoid potential compliance issues. &ldquo;If I go to my local fuel station and buy a truckload of E10 and the next day I buy a truckload of B12.5, I cannot pour that truckload of B12.5 into the E10 that&rsquo;s already in the tank because it will reduce the volume of ethanol in the tank to less than 9 percent,&rdquo; explains Glenn Johnston, vice president of regulatory affairs at Gevo. &ldquo;Thus, even though the two fuels separately are perfectly legal in commerce, when you mix them together in an underground storage tank they would be illegal. It&rsquo;s a complexity in the compliance that we are working with EPA to resolve. It has nothing to do with the emissions criteria or the cleanliness. It has everything to do with how the EPA enforces the fuel and fuel additives underneath the Clean Air Act in commerce.&rdquo;
Butanol producers also need to register their fuel with the U.S. EPA before it can be introduced for sale in the marketplace. The registration process requires the producer to disclose the fuel additive&rsquo;s chemical composition and to describe an analytical technique that can be used to detect the presence of the additive in the fuel. The applicant must also complete various tests to analyze evaporative emissions, to screen for potential health effects from emissions and to provide other scientific information related to the fuel. In October 2010, Gevo successfully registered its product as a small business and is working now on completing the Tier I and Tier II registration with the EPA. Butamax says it expects to complete the registration process on a timeline consistent with its plans to produce commercially in 2014. Not Just a Fuel Finally, butanol producers must overcome the cost of production in order to be a competitive player with ethanol. As with every second-generation biofuel, production costs are currently higher than for first-generation ethanol. However, while ethanol&rsquo;s mainstay is in the transportation fuels market, butanol producers can easily venture into the chemicals market, where the cost of production suddenly becomes much more manageable. As a testament to this, Gevo has committed most of its production capacity for the next two years to Sasol Chemical Industries Ltd. Green Biologics will initially sidestep the fuels market entirely in favor of chemical production. &ldquo;Why use butanol for a fuel when it can be marketed as a higher value chemical?&rdquo; asks Stone. He says that while butanol holds great potential as a fuel, it still needs to overcome some of the same regulatory issues ethanol faces. Meanwhile, the chemical applications are well-known and represent a 10 billion-pound-per-year market for the n-butanol Green Biologics plans to produce. So, as is the case for many potential biorefiners, Stone says it is a wiser choice to produce butanol for chemical markets initially so that plants can capture the most profit while working to drive the price of butanol-for-fuel production down to more competitive levels. This will allow entry into the biofuels markets when demand and economics are matched, he says. Niche Market Gevo believes that while chemical markets represent a profitable venture for butanol production, there is also great potential for it to be used in segments of the transportation fuel market that currently hold issue for ethanol, namely marine and small engine equipment. Not all of Gevo&rsquo;s initial production volume will be sold to Sasol because it wants to have enough to also seed the marine fuel market and other specialty applications that have tested well using butanol. &ldquo;I would anticipate that could be one of the first markets you&rsquo;ll see us in&mdash;a local marina, if you will&mdash;supplying an option for the marine market that would be better than their option of ethanol-blended gasoline,&rdquo; says Brant DeMuth, executive vice president of strategy and corporate development for Gevo. &ldquo;The marine group has been very supportive because of their work on testing our blendstocks with E15 and the better performance, quite frankly, that they got out of isobutanol-blended fuel.&rdquo; Gevo supplied isobutanol for testing on marine and small engines last fall that showed promising results. The National Marine Manufacturers Association and the Outdoor Power Equipment Institute both stated isobutanol-blended fuel performed better in those types of engines than E15 and indicated it could be a viable biofuel alternative. Why Try? Despite the regulatory hurdles and initial cost to produce, butanol producers are confident that the ethanol industry will agree its value is worth the effort. Stone even envisions a production model that would allow ethanol plants to produce their own 100 percent, bio-based E85 by replacing petroleum-based gasoline with butanol. &ldquo;If you have a bolt-on butanol plant and you produce butanol using 15 percent of the corn volume, you could produce E85 with butanol and sell it directly to your regional distributor,&rdquo; he suggests.
Gevo executives say ethanol producers will likely relish the opportunity to produce a product that can be sold to markets without the same volatility experienced in the ethanol market. DeMuth says that was a selling point for the Redfield, S.D., plant. &ldquo;They&rsquo;ve made good money in good times and they&rsquo;ve lost money in the challenging times, despite being one of the best operating plants in the U.S.,&rdquo; he says. &ldquo;They looked at the isobutanol opportunity to reduce the volatility of their profit margin, but also to expand the profit margin. Even when split with Gevo, they have the opportunity to make more money selling into that specialty chemical market than they would otherwise have had selling into the fuel market. It opened up new markets, potentially higher margins and, equally importantly, less volatility of those margins, which is why they agreed to the joint venture terms that we have with them.&rdquo;&nbsp; Author: Kris Bevill Associate Editor, Ethanol Producer Magazine (701) 540-6846 kbevill@bbiinternational.com

Green Biologics Limited is currently retrofitting three facilities in China to produce n-butanol using a variety of feedstocks.  

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Butanol producers seeking to transform the ethanol industry are employing a variety of production methods. Gevo Inc.â€™s method, shown in the diagram above, utilizes biotechnology to replace metabolic pathways in a robust yeast biocatalyst to produce

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Gevo Inc.â€™s first commercial-scale butanol production facility is a former ethanol plant located in Luverne, Minn. The facility is expected to begin production this year. 

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Can biobutanol provide ethanol producers new paths towards diversification?

Target For Transformation

The beginning of a new year brings new opportunities, even when expected changes are on the horizon. As ethanol plants said good good-bye to 2011, they also prepared for the end of the small producer tax credit, the Volumetric Ethanol Excise Tax Credit, the 100 percent bonus depreciation and the research and development credit&mdash;to name just a few.
While the industry has appreciated those credits and incentives, this year also marks the final year for two additional biofuel tax advantages passed during the presidency of George W. Bush that generally lowered tax rates and revised the code. These included the Economic Growth and Tax Relief Reconciliation Act of 2001 and the Jobs and Growth Tax Relief Reconciliation Act of 2003.
The Obama administration extended the rates for two years as part of a larger tax package we know as the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010. The 15 percent capital gains rate will end Dec. 31 and yet another good-bye will be to the 50 percent bonus depreciation, which was intended to stimulate the economy.
Still, ethanol plants and ethanol plant owners in a pass-through structure should continue to monitor these tax opportunities as Congress could extend or modify either one. To take advantage of the capital gains rate, it might be worth considering triggering some LT capital gains in 2012 and paying the 15 percent tax, then rebuying the asset with a higher basis to be used in future years when capital gains rates are higher. This, of course, assumes a taxpayer&rsquo;s ordinary income is going to be taxed at the same or higher rates in the future when compared to today. If a plant is considering capital expenditure projects and, all things being equal, the time value of money might suggest buying the assets in 2012 versus waiting until next year or 2014.
Did I mention a new year also brings new opportunities and challenges? There are tax changes slated to take effect in 2013 as a result of the Healthcare and Education Reconciliation Act. Investors in ethanol plants may find a significant provision called the surtax, which is a 3.8 percent Medicare tax. This surtax applies to individuals, trusts and estates with income that exceeds specific thresholds. In addition, the surtax is assessed differently for trusts and estates than for individuals. The 3.8 percent surtax will be applied to the lessor of net investment income or modified adjusted gross income in excess of a threshold (ranging from $11,000 to $250,000, depending on filing status). Income from passive investment activities is included in net investment income and therefore, many ethanol investors will have net investment income subject to the surtax.
An immediate question is how to make an investment active or not passive. Unfortunately, that isn&rsquo;t always possible, and those considered active can be subject to self-employment income on that activity, which results in a 3.8 percent tax as well. Every situation will be different but, for example, if an ethanol plant allocates $2 million of passive income to its members, the additional tax could be $76,000. A plant and the members should consult their tax advisor for specific details on the impact of the surtax.
The new year also brings new legislative sessions at the federal and state level.&nbsp; As the respective governmental bodies deal with budget crisis, stimulate new business and modify the tax code, we are guaranteed to see additional proposed changes that must be followed and analyzed to lend our support for or against these measures&mdash;both to protect our own business but also the industry as a whole.
Though we always anticipate change in tax credits from year to year, it is important for any business to plan from the beginning for the year ahead. Taking advantage of the the capital gains rate and bonus depreciation in 2012 and planning for the surtax in 2013 can make your year the best it can be. Author: Donna Funk CPA, Kennedy and Coe LLC (800) 303-3241 funk@kcoe.com

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Get in Gear for Tax Changes in 2012

When Cassandra Moseley, Max Nielsen-Pincus and the rest of the team at the University of Oregon&rsquo;s Ecosystem Workforce Program (EWP) first started their research into the impact of the state&rsquo;s biomass producer and collector (BPC) tax credit, they had no preconceived notions about whether the tax credit was good or bad.
 They were interested in forest restoration and intrigued by the job creation possibility of a policy linked to biomass. And they planned on letting Oregon&rsquo;s policymakers decide whether a tax credit that awards $10 for every green ton of biomass delivered to a bioenergy facility is worth the money. But that was before the team, which also included members of Oregon&rsquo;s Department of Energy, finished its work.
 Now, after biomass prices and regression analyses simulating a world without the BPC tax credit, the results are in. And they show that policymakers have an easy choice to make.
 The Main Effects 
 When the team&rsquo;s research into the BPC began in 2010, the amount of information on wood fuels markets and the economics of biomass collection was limited. With the help of Forest2Market, the research team compiled biomass prices dating back 10 years. The team also reached out to several Oregon businesses to discuss the typical costs of transporting woody biomass. &ldquo;We tried to tie any information that did exist to this particular tax credit program,&rdquo; Pincus says.
 Moseley says the researchers had three goals. First, determine if the tax credit was actually financially affecting the wood fuels market. Second, find out if the amount of biomass flowing into the market was fluctuating in relation to the BPC. And the third goal was centered around employment. &ldquo;We wanted to know whether it was creating or sustaining any new or existing jobs,&rdquo; Moseley says.
 To satisfy those goals, the team created a statistical model based on figures from before the tax credit, and then projected the fuels market pricing out through 2010 as if the credit had never been implemented. The team then compared the fuel pricing market conditions, with the tax credit versus without.
 &ldquo;What we&rsquo;ve learned is that the tax credit has helped prices in the wood fuels market,&rdquo; Pincus says. But that&rsquo;s only one of the ways the BPC tax credit impacted the state. The research by EWP shows the tax program also supported between 32 and 73 jobs in 2010. The most powerful testament to the effectiveness of a state&rsquo;s commitment to the growth and health of the biomass industry, however, is a comparison between what the state got out of the BPC and what it had to put in.
 At an average price of $30.11 per bone dry ton (BDT), the EWP calculated that 10,000 BDT equaled $301,000, and would be eligible for $178,571 in tax credits. That means 10,000 BDT of forest biomass delivered to a bioenergy facility would support roughly 5.1 jobs, $241,000 in wages and benefits, and $868,000 in direct, indirect and induced economic activity. The net tax expenditure cost of all that is about $143,000.
 &ldquo;This study shows that the tax credit seems to have generated more economic activity than it cost the state in tax,&rdquo; Moseley says. &ldquo;The credit moderated the price increases that would have happened otherwise in the wood fuels market caused by the economic downturn.&rdquo;
 As of March 2011, 52 biomass providers and collectors requested nearly $6.6 million in BPC tax credits for fiscal year 2010, according to the research. About $5.5 million of that came from more than 550,000 green tons of woody biomass. The average amount request by each participant totaled $126,931.
 And it all came at a time of economic peril, during a downturn in the housing market that was creating typical sources used in bioenergy facilities, such as hog fuel and mill residues. But, decreased demand didn&rsquo;t follow the decrease in supply. &ldquo;The demand (for biomass) was still growing because of our increasing demands for renewable energy,&rdquo; Pincus says.
 That steady demand for biomass-based energy was still met, however, through the BPC tax credit. &ldquo;The credit essentially allowed for material to come out of the woods that wouldn&rsquo;t have otherwise come out,&rdquo; Pincus says. &ldquo;It allowed that demand for wood fuels and for biomass to continue to grow.&rdquo; And without the BPC in place, the price of woody biomass would have climbed during the decrease in supply. According to the research, the price of forest biomass would have been roughly 20 percent higher, and availability would have been 20 to 30 percent lower.
 The BPC not only helped sustain the health of the woody biomass supply market in Oregon, but it also helped sustain jobs involved with the handling, delivering and storing of biomass.
 The Future 
 Matt Krumenauer is a senior policy analyst at the Oregon Department of Energy and an integral part of the BPC program. Krumenauer helped assemble the team tasked with analyzing the effectiveness of the tax program. He was responsible for implementing and evaluating the BPC credit, and says he&rsquo;s happy it has been extended through 2018.
 But a few changes have been made to the program. Most notably, the unit of measure will switch from green tons to bone dry tons. In addition, stand alone electricity generation sites will not be eligible for the tax credit because combined-heat-and-power facilities will better assist in reaching energy efficiency standards set by the state&rsquo;s DOE.
 Krumenauer doesn&rsquo;t envision any more changes to the BPC program in the foreseeable future, and is already working to implement more biomass programs. In the past, his department created incentives for equipment, or for the construction of new facilities, and now is looking at the biomass thermal sector. &ldquo;We are starting to focus more on our heating sector&hellip;trying to provide our communities with access to biomass heating systems,&rdquo; he says. That could include applications in hospitals, schools, commercial buildings and prisons.
 But for now, Krumenauer and his EWP team have one more major task at hand: analyze the effect of the BPC tax credit in the absence of major federal incentives such as the USDA&rsquo;s Biomass Crop Assistance Program. Although the analysis is still in progress, Moseley, Pincus and Krumenauer agree that the information for 2010, and most likely for 2011, shows that the BPC undoubtedly stimulates at least one important part of the market: the middle of the supply chain. &ldquo;It doesn&rsquo;t stimulate final demand, it doesn&rsquo;t create more consumers, nor is it directly building any new production facilities,&rdquo; Moseley says. &ldquo;But it could potentially create some investment decisions.&rdquo;
 &ldquo;One could imagine that with a time horizon of this particular tax credit being here until 2018, that that might impact somebody&rsquo;s investment decision about building new biomass capacity,&rdquo; Pincus adds. And, although neither Pincus nor Moseley believe the BPC program is a silver bullet, they do adamantly argue for its strengths. The link the team found between the BPC and the wood fuels market is more than merely casual, they say. They both believe the market would have been far less fiscally successful and sustainable over the past few years without such a program in place.
 For Krumenauer, the choice to extend the program through 2018 was an easy one, given its economic sustainability factor. &ldquo;I think that being a resource-dependant state, the value that the legislature saw was really being able to put loggers and farmers and contractors back to work creating energy products when the markets for housing products, timber and forest products markets declined.&rdquo;
 And, of course, the program will lower Oregon&rsquo;s carbon impact through the next six years of its life. But in today&rsquo;s economic climate that starts and ends with jobs, the research by the EWP team proves bioenergy affects more than just greenhouse gas emissions.
 &ldquo;(Legislators) extended it through two other legislative cycles and I believe they wanted to provide some assurance that the program would be available so that they could begin to make business decisions,&rdquo; Krumenauer says. Author: Luke Geiver Associate Editor, Biomass Power &amp; Thermal <a href="mailto:lgeiver@bbiinternational.com">lgeiver@bbiinternational.com</a> (701) 738-4944

PROFITABLE ALTERNATIVE: Oregon's BPC tax credit encourages the use of biomass slash piles that would have otherwise been burned. 

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SEE FOR YOURSELF: The results and products of the BPC program are clear, and are showcased during Oregon biomass resource tours.


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Clean Forest Floor: The program incentivizes the removal of usable biomass from forest thinning.


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HITTING THE TARGET: The BPC tax credit created biomass handling jobs in an otherwise slow 2010 economy.



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A producer and collector tax credit has improved economic sustainability in Oregon's biomass industry 

Biomass Sustains Business

Any visitor to the U.S. Midwest knows the region isn&rsquo;t recognized for glorious mountains, warm weather or sunshine. It does, however, boast flat and vast plains, long stretches of grassland, and highly productive soil that allows it to produce an abundance of cereal crops.
 To some, that&rsquo;s an ideal scenario for growing a biomass energy industry off the back end, and numerous industry experts are busy examining its viability and potential impacts. As with any emerging industry, there are some hurdles and kinks to be worked out, but there is a resounding consensus across the scientific community that Midwestern crop residue and cattle manure will play a key role in the region&rsquo;s energy future. In fact, one recently published, USDA-backed study has determined that biomass alone could be used to produce 15 percent of the Midwest&rsquo;s electricity.
 Assessing Availability
 Authored by Chicago Council Senior Energy Fellow Steve Brick, &ldquo;Harnessing the Power of Biomass Residuals: Opportunities and Challenges for Midwestern Renewable Energy,&rdquo; considers the residual biomass resources of Illinois, Indiana, Michigan, Minnesota, Ohio and Wisconsin. According to Brick, the year-long project involved three main steps: preparing a regional residual biomass inventory, developing an assessment of conversion technology readiness and economics, and developing policy recommendations.
 Brick&rsquo;s team arrived at its 15 percent of Midwest electricity conclusion by converting all of the &ldquo;ecologically available&rdquo; biomass to dry tons, and assuming it would be burned in a conventional boiler.&nbsp; &ldquo;This was done as a way to bind the total contribution that waste biomass could make to the regional energy supply,&rdquo; he says. &ldquo;We made the same calculation for ethanol&mdash;assuming all the biomass could be converted&mdash;and found that 17 percent of the region&rsquo;s gasoline could be supplied from biomass residuals.&rdquo;
 Residuals included in the report are crop residues such as corn stover, soy straw and wheat straw; manure from swine, cattle and poultry; and forestry, primary mill and urban wood residues. While corn stover leads in crop residue annual tonnage at 106 million tons, Brick points out that the logistics of harvesting, transporting and storing corn stover are uncertain. &ldquo;Questions of how much stover can reasonably be harvested, who harvests it, how it is harvested, transported and stored must be addressed before a new industry can take shape,&rdquo; he says. &ldquo;We really need to consider biomass energy systems in the broader landscape contexts in which they occur. The land-water-air-wildlife-human interactions are critical, but easy to ignore if we just consider biomass as an energy resource. A landscape perspective is harder to develop and talk about, but it is really the key to smart protection and utilization of our natural resources.&rdquo;
 Unlike corn stover-to-energy, the anaerobic digestion (AD) industry isn&rsquo;t new to the Midwest. It is already home to 52 of the nation&rsquo;s 169 anaerobic digestion projects. Most of the digesters are concentrated in the Great Lakes region, but the 33 MW contribution to the regional energy supply represents only 2 percent of installed capacity, according to Brick. He believes AD energy potential in the region is huge, even though it is challenging financially. &ldquo;AD is a great technology for producing biogas for use in a turbine, as a boiler fuel or a transport fuel, and a great way to reduce water quality issues associated with manure and reduce greenhouse gases,&rdquo; he says.
 Digest This
 Currently, only about 1 percent of the Midwest&rsquo;s cattle manure is managed through AD, and digesters are found on only about 10 percent of the region&rsquo;s largest dairy farms. With the amount of manure available&mdash;14 million tons annually from cattle alone&mdash;why aren&rsquo;t more farms taking advantage of the technology?
 &ldquo;I think there are several reasons why,&rdquo; says Amanda Bilek, energy policy specialist for the Great Plains Institute. &ldquo;Part has to do with public policy, and a lack of support in individual Midwestern states with the exception of Wisconsin, which is a shining example for the other states. They&rsquo;ve done better than any other Midwestern state by collaborating with state agencies, producer associations, and leveraging some federal resources.&rdquo;&nbsp;
 Wisconsin has the most AD installations of any state in the country, according to Bilek. Outside of the policy realm, another factor influencing the lack of AD projects is the low price of electricity in the Midwest. &ldquo;A lot of AD project models have been focused on producing renewable electricity, but we have very low prices in the Midwest overall,&rdquo; Bilek says. And because digesters require a large capital investment, selling the resulting electricity in the Midwest often means a really slow return on investment. &ldquo;That deters some producers from installing them, because they can be viewed as risky.&rdquo;
 Biogas doesn&rsquo;t have to be converted into electricity, though. &ldquo;It can also be a source of renewable natural gas, cleaned and compressed even further into vehicle fuel, or a source of heat in certain applications,&rdquo; Bilek says. &ldquo;If we only look at one specific type of utilization of the gas&mdash;electricity&mdash;we&rsquo;ve really missed the potential opportunities there.&rdquo;
 The low price of natural gas is another AD hindrance, according to Brett Hulsey, president of Better Environmental Solutions, a Wisconsin-based clean energy consulting, managing and development firm. &ldquo;Actually the biggest challenge in the biomass industry as a whole is cheap natural gas&mdash;at $2.50 per 1,000 cubic feet, energy efficiency barely pays,&rdquo; he says. &ldquo;I&rsquo;ve been at this 30 years, and I&rsquo;ve seen natural gas take a wild swing.&rdquo;
 Hulsey, also a Wisconsin state legislator and a Dane County board supervisor, served as an environmental policy advisor to President Bill Clinton and worked as an environmental educator and advocate for the Sierra Club for 17 years. He says another hurdle to widespread AD implementation and bioenergy in the Midwest is getting farmers to understand the right amount of manure and corn stover to put back on the soil. &ldquo;Any more than [the right amount] results in more phosphorus and nitrogen pollution,&rdquo; he explains. &ldquo;This industry is also part of a water quality improvement solution, because when you have too much manure or corn stover on the soil it creates water pollution.&rdquo;
 &nbsp;For corn stover, the adequate amount is about two to three tons per acre, but manure varies greatly. &ldquo;A lot of soil in Wisconsin doesn&rsquo;t need more phosphorous,&rdquo; he says. &ldquo;So if we can separate the biomass out of the manure&mdash;we&rsquo;re actually doing that at a pilot project in Dane County, separating liquids from solids after the digester&mdash;the phosphorus stays with the solids.&rdquo;
 Despite the aforementioned challenges, AD development has continued in the Midwest over the past decade. &ldquo;It&rsquo;s been slowly increasing, and there are some real pockets of significant development, especially in Wisconsin,&rdquo; Bilek says, adding that since the state is home to a manufacturer of an AD technology, producers likely feel more secure having someone in their backyard to help with trouble shooting.
 In Minnesota, the number of digesters has tripled from two to six in the past 10 years, and other states in the region have had similar increases. &ldquo;That&rsquo;s not a huge amount of growth, but its growth,&rdquo; Bilek says. &ldquo;We just have to get the technology over the first hump. Creating more incentives would help, at least to get over the initial economic barrier until more systems are installed and the costs come down.&rdquo;
 And once the AD and biomass energy industry in general gets rolling in the Midwest, so will new employment.
 Jobs and More
 A 2007 analysis performed by Hulsey found that the industry could create 100,000 jobs in Wisconsin alone. &ldquo;We import $12.5 billion worth of energy per year for coal, oil, and natural gas, and conservatively that&rsquo;s a 100,000 job loss,&rdquo; he explains. That&rsquo;s following a rule of thumb for one job created for every $50,000 kept in state. &ldquo;Iowa generates about 39 million tons of corn stover per year, and they are already generating more fuel than they use,&rdquo; Hulsey says. &ldquo;They import about 20 million tons of coal a year, but they could be almost energy self-sufficient. That&rsquo;s one of the next studies I may do, an energy import study, to really hone in on the jobs question.&rdquo;
 Speaking of replacing coal, in another of Hulsey&rsquo;s 20 studies, &ldquo;Cellulose Prairie: Biomass Fuel Potential in Wisconsin and the Midwest,&rdquo; he found 12 Midwestern states generate up to 231 million tons of potential excess biomass each year that could replace 37 percent of the coal used in those states, 50 percent in Wisconsin alone. Hulsey says coal replacement conversions were a key concept in the study, as previous data hadn&rsquo;t put information in such real terms.
 Moving on to other Midwestern benefits, one environmental advantage not often associated with biomass energy is reduced flooding. &ldquo;Many studies have shown that planting cropland to grasslands, combined with other conservation practices, can reduce 100-year floods by 15 to 39 percent,&rdquo; Hulsey says. &ldquo;Basically we&rsquo;re restoring nature&rsquo;s sponges&mdash;especially with grassy biomass&mdash;that store flood waters. I worked on a project two years ago where we restored a wetland area to both willow and switchgrass, and the idea there was to build more of nature&rsquo;s sponges to reduce water on the land and in people&rsquo;s living rooms.&rdquo;
 While biomass is usually snubbed in the energy portions of typical presidential speeches touting home-grown fossil fuels and other sources of renewable energy, it plays a significant role in the country&rsquo;s current energy portfolio. &ldquo;Biomass is the Rodney Dangerfield of energy&mdash;&lsquo;we don&rsquo;t get no respect,&rsquo;&rdquo; Hulsey jokes. &ldquo;But really if you look at (U.S.) DOE numbers, it equals about half of renewable energy in the U.S., especially here in the Midwest and in Wisconsin.&rdquo;
 Overall, the important thing to remember about biomass fuel is that it&rsquo;s all local.&nbsp; &ldquo;You have to set your fuel systems up according to what you have,&rdquo; Hulsey adds. &ldquo;For example, Iowa has corn stover. The Saudi Arabia of America is right here in the Midwest, and while we aren&rsquo;t a Silicon Valley, we can be the &lsquo;cellulose prairie,&rsquo; making our own energy and jobs.&rdquo; Author: Anna Austin Associate Editor, Biomass Power &amp; Thermal <a href="mailto:aaustin@bbiinternational.com">aaustin@bbiinternational.com</a> (701) 751-2756

GROUNDWORK: A local farmer and researchers from Better Environmental Solutions, University of Wisconsin Soil Center, and Veridian Homes, work on a 2010 hybrid willow biomass restoration project in Wisconsin. 


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The U.S. Midwest has considerable biomass energy potential, specifically in anaerobic digestion applications

The Breadbasket's Biomass Belt

The word sustainability has broad definitions, but many of us in the bioenergy industry&nbsp; associate it with ensuring the health and vitality of the feedstock source after a biomass harvest, whether it&rsquo;s cropland, forestland, forestry residue, or another resource.
 It certainly isn&rsquo;t a new concern and is a vital aspect of every biomass project&rsquo;s feasibility study. But sustainability doesn&rsquo;t only revolve around feedstock. A successful, well-planned and well-executed biomass project can bring economic sustainability, also. A biomass producer and collector tax credit in Oregon has done just that, and therefore, has been extended through 2018. The credit has created jobs along the woody biomass supply chain, enhanced forest health, and brought revenue to the state. A research team discovered the positive impacts while analyzing the economy with and without the tax credit. The results are clear. Read more about it in a feature article by Associate Editor Luke Geiver, beginning on page 18.
 Elsewhere, however, the biomass industry is facing the loss of many incentives supporting development. In February, leaders from the Biomass Power Association, National Hydropower Association and Geothermal Energy Association wrote a letter to Congress urgently calling for an extension of the renewable energy production tax credit, set to expire in 2013. Don&rsquo;t wait until the end of this year to extend it, they say, as it would mean the loss of an entire construction season for all their industries. I like to see renewables groups pushing together for support and I see it happening more, as concern about incentives mounts among all of us. The federal government could take a lesson from Oregon.
 As the state has shown, the biomass industry has an abundance of advantages to offer citizens, communities, states and even entire regions. The U.S. Midwest, for example, could benefit from existing resources in agriculture and purpose-grown biomass. In another feature in this issue, beginning on page 24, Associate Editor Anna Austin explores and expands upon existing research into the region&rsquo;s cropland biomass resources and their ability to jumpstart a robust bioenergy industry that stimulates the economy.&nbsp;
 The biomass industry is continually discovering more potential to flourish and make a difference in the U.S. domestic energy sector. This issue of Biomass Power &amp; Thermal highlights just a few intriguing opportunities in a growing list that includes feedstock options, as well as expansions of successful financial incentives.

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An Abundance of Opportunities 

In the age of abundant calls for smaller government and consolidated agencies, you&rsquo;d think that government agencies would be heeding the calls to scale back and cut unnecessary regulations that would cost significant time and funding for very little gain.
 The U.S. EPA is proposing to do just the opposite. The agency has refused to classify the waste wood used to generate biomass energy as a fuel, its historical classification. Instead, EPA may treat the material as a waste in the same category of material that goes to a landfill.
 This seemingly small change has surprisingly large implications for our industry. It would render unusable several types of traditionally accepted materials used for biomass power generation. Materials like urban waste wood, such as pallets after they are used for construction, would be redirected from biomass facilities to landfills. This would cause the twin consequences of clogging up the precious little space in landfills, and the release of methane gas, a greenhouse gas that&rsquo;s 25 times more harmful than carbon dioxide, into the atmosphere.
 Using these materials in the generation of biomass energy, however, allows for the capture of harmful gases along with the support of hundreds of jobs and the production of thousands of megawatts of renewable energy. This is why many states, including Maine, New York and California, recognize urban waste wood and other similar materials as fuel instead of waste, allowing the biomass industry to use them to their full potential.
 If the EPA were to codify this regulation, besides limiting the materials available to the biomass industry, the agency would be required to devote untold hundreds of hours of manpower to monitor and enforce these rules.&nbsp;
 The EPA is, by any measurement, currently stretched thin. Administrator Lisa Jackson has repeatedly acknowledged that the agency does not have the resources available to properly monitor the process of hydraulic fracturing if the EPA finds it contaminates drinking water. &ldquo;There is no EPA setup that allows us to oversee each and every well that&rsquo;s drilled,&rdquo; she said during a February teleconference hosted by the American Sustainable Business Council, before going on to say that the agency will continue to focus on the &ldquo;big things.&rdquo;
 The re-regulation of certain types of wood waste as waste instead of fuel is a small thing that will reap very little in terms of improved air or water quality, at the big cost of removing a sizable portion of fuel used by the biomass industry. Author: Bob Cleaves President and CEO, Biomass Power Association <a href="http://www.USABiomass.org">www.USABiomass.org</a>

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Small Government, Big Changes to Biomass Regulations 

According to the U.S. DOE&rsquo;s Billion-Ton Update, more than 500 million tons of solid biomass waste is produced in the U.S. annually, and that figure is estimated to expand beyond 1 billion tons by 2022. As the country's energy policy evolves and the biomass waste industry continues to grow, solid biofuels will become a staple of American energy. In order for that to occur, biomass energy projects need to continue to be successful, and that requires consideration of several factors.
 A successful biomass project should have a well-defined fuel source, as well as properly sized and selected equipment. The primary focus at the front end of every solid biofuels project is identifying the potential feedstock source. Currently, potential biomass sources must always be verified through chemical and physical analysis to ensure the fuel is compatible with the thermal equipment for achieving complete combustion and emissions compliance. Solid biofuels can vary in calorific value, moisture content, and ash content based on class, region, and climate, even on a load-to-load basis. Because of these variations, equipment performance and project economics are at risk of degradation without a proper, uniform definition for solid biofuels.
 Currently, domestic feedstock sources are defined by thermal conversion equipment suppliers or by solid biofuel producers, generally according to different terms.&nbsp; Equipment suppliers are typically focused on a performance-basis, while solid biofuel producers are focused on a value-basis. Unfortunately, this leads to inconsistencies in definitions of solid biofuel quality, quantity, and value, creating uncertainty for both users and providers. This uncertainty creates a level of perceived risk from an economic perspective.&nbsp;
 At the Pacific West Biomass Conference &amp; Trade Show in January, much discussion was focused on the standardization of a solid biofuels definition, with the goal of achieving commoditization. A proper definition on a standardized basis is needed to ensure that the user is able to source compatible solid biofuels of a consistent quality, quantity, and value. The European Commission has developed and implemented standardized specifications and classes for solid biofuels according to CEN/TC 335. They eliminate the ambiguity between users and providers for sourcing and selling solid biofuels. Establishing solid biofuels as commoditized products also allows for a consistent basis of trade throughout the U.S., independent of localized factors.
 Universities and energy policy advocates are the most likely candidates to implement this level of standardization in the U.S. The development of terms and definitions is the first step, followed by advocacy and acceptance by the industry. When this occurs, consumers and producers will have a standardized basis to fulfill performance and value requirements while mitigating biomass energy project risks. This will accelerate the growth of the solid biofuel market and effectively utilize the 1 billion tons of solid biomass waste estimated to be produced annually over the next 10 years. Author: Joshua Holmes Vice President for System Development Alternative Energy Solutions International, Inc. BTEC member <a href="http://www.aesintl.net">www.aesintl.net </a>

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Fueling America: The Need for Standardization of Solid Biofuels

As I described in my February Biomass Power &amp; Thermal column, the Energy &amp; Environmental Research Center has built and tested a mobile system for converting wood waste into liquid products such as methanol. The system uses a unique gasifier to convert the wood waste into synthesis gas, which is cleaned, compressed, and converted in a reactor to a variety of possible liquid products. We have initially focused on the production of methanol because it can easily be reformed into hydrogen to power fuel cells to make electricity at remote sites distanced from the biomass resource. The gasifier was specifically designed by the EERC to handle wet wood waste with up to 40 percent moisture, thereby eliminating the need to separately dry the wood before gasification, as most commercial gasification units require.
 We have found that the maximum wood feed rate of the system is largely determined by the size of the compressor that can fit on the trailer. The production rate of methanol is greatly enhanced at higher pressures, so we compress the gas to 900 pounds per square inch (psi) before it enters the gas-to-liquids reactor. Given our current configuration, we are limited to converting approximately 160 standard cubic feet per minute of gas into methanol liquids using a system mounted on a single trailer. This is the amount of gas produced from gasifying approximately 200 pounds of wet wood per hour. The information gained from recent tests was used to validate a computer model of the system based on gas production rates and composition. Using the model results, engineers have come up with several improvements to the system that should increase the hydrogen content of the syngas and permit production rates as high as 100 gallons per ton.
 At that production rate, the 300,000 tons of unused forest residue produced each year in Minnesota could be converted to approximately 30 million gallons of methanol. A fuel cell uses approximately 1 gallon of methanol to create 5 kilowatt hours (kWh) of electricity, so 30 million gallons of methanol could be used to create 150,000 megawatt hours (MWh) of electricity by fuel cell in remote locations. The system is primarily operated via computer control that can be largely automated. This method, rather than continuous monitoring, significantly reduces labor requirements of handling upset conditions such as plugged filters. Therefore, the system is designed for sites where labor is available sporadically from other ongoing activities, significantly reducing labor costs.
 One of the biggest operating costs comes with the electricity needed to run the compressor. One way to reduce this cost is to use excess syngas to fire a modified generator to produce the electricity on-site, a technology that the EERC is currently developing in cooperation with a generator manufacturer. If we assume that electricity is purchased at 7 cents per kWh, then production cost predictions are $1.58 per gallon using grid power, but as low as 95 cents per gallon if electricity is produced using excess syngas. Both of these costs are based on using wood waste that has no commercial value and is, therefore, free of charge.
 In addition to the operating cost, the capital cost of the system must be paid off. We estimate that the cost of the trailer-mounted system with an additional syngas-fired generator and other improvements to increase the production rate to 100 gallons per ton would be approximately $1 million. Assuming an 8 percent interest rate and payoff of the loan over 10 years, the combined capital and operating cost is approximately $3.05 per gallon using grid power, or $2.59 per gallon using onboard generation. These costs are considerably higher than the current delivered cost of methanol created from natural gas, especially because of the low cost of shale gas being produced. In some situations, however, even these relatively high costs are acceptable. This is particularly true of operation in remote locations where the delivered cost of methanol may be very high, or in cases where additional incentives, such as carbon credits, are available. More commonly, production of other liquids, such as Fischer&ndash;Tropsch fuels or other organic chemicals, might be more economical at this time than methanol, at least at the scale of a mobile system mounted on a single trailer. Project funding is provided by Xcel Energy customers through a grant from the Renewable Development Fund and the U.S. DOE. 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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Economic Analysis of a Mobile Indirect Biomass Liquefaction System

Biomass facilities are a great source of renewable energy, but difficult to develop and finance. Despite their typically smaller size (usually 50 MW or less) their complexity is significant. Developers must secure financeable fuel supply agreements outlining appropriate term, quantity, quality and price with a creditworthy counterparty, obtain a financeable power purchase agreement, and have a thick skin and capital to get through permitting and the inevitable public relations fight.
 With a financeable project, the developer can arrange permanent financing, which can be leveraged or unleveraged. Recently, most transactions have been leveraged to achieve the desired returns, with the equity component comprising 30 to 50 percent of the total capital costs. The balance of the permanent financing will be debt financed.
 Debt financing for biomass projects will usually be structured as non-recourse, relying on the project&rsquo;s assets as collateral and looking to the cash flow for debt service. The lenders will generally not have any recourse to the sponsor or other equity investors. Leverage at the project level will increase equity returns but also require higher tax equity returns and increase complexity. For these reasons, sponsors will sometimes seek to instead back lever projects.
 Banks or institutional lenders are the primary sources of debt financing. The lenders active in the space are experienced and knowledgeable, which is critical to successfully completing the debt financing. For banks, tenors have recently lengthened to as long as 15 to 17 years for a fully amortizing loan. Institutional lenders will typically be longer term, 20 to 25 years, but with higher rates.
 Perhaps the cheapest debt, but easily the most time consuming, is commercial loans backed by the USDA and the U.S. DOE. The terms of the loan will be determined by the commercial bank but the loan guaranty increases the credit support and reduces the interest rate. Significant downsides to these loan guaranty programs include the time, upfront cost and complexity of getting them completed.
 Other federal financing programs include tax-exempt bonds, such as Clean Renewable Energy Bonds, bonds backed by loan guaranties under USDA Section 9003, and New Market Tax Credits. The CREBS have not been widely used for various reasons. The Section 9003 program was not overly successful because lenders did not offer terms to successfully finance projects. As recently revised, Section 9003 loan guaranties can backstop bonds issued by the company in a private placement to qualified buyers. The funds are then held by a commercial bank as a trustee.
 The New Market Tax Credits program allocates tax credits to community development organizations (CDO) to create jobs and economic development in low-income areas. An investor will fund a developer&rsquo;s project through the CDO in return for federal tax credits at 39 percent. A CDO typically allocates about $10 million to a single project. If a project needs $50 million of NMTCs, the sponsor will need five CDOs to participate. NMTC transactions are very complex and a developer needs to work with experienced advisors.
 Equipment vendors and EPC (engineering, procurement and construction) contractors may also be a good source of permanent financing, as well as equipment or construction financing. Foreign vendors generally will have limited or no ability to use federal tax credits, so may not be a source of tax equity. Vendors who invest in the project may also have concerns about accounting treatment for various items, including consolidation of the project liabilities and the character and timing of revenue recognition.
 Finally, debt financing through private placements of debt or bond offerings are gaining attention with very low rates and terms of 25 to 30 years. Securitization is difficult to combine with tax equity in a single project, so is more efficient for financing a portfolio of projects to achieve the scale needed by institutional investors.
 With so much complexity, it can be nearly impossible to determine the right approach (or approaches) and to secure that particular type of financing. A sponsor would be well-served to focus on a few key items. First, make sure your project is solid and financeable. Second, understand your financial model and what cost of capital is needed to make the project successful. Finally, make sure your advisors and counterparties have experience with the development of biomass projects and the financial structures being proposed. Development and financing of a biomass project is complex. Don&rsquo;t reinvent the wheel unless it is your only option, or there is a very real and significant benefit. Author: David Benson Partner, Stoel Rives LLP (206) 817-7470 <a href="mailto:dlbenson@stoel.com">dlbenson@stoel.com</a>

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Arranging Debt Financing for Biomass Projects

Negroponte joins Greenwood Energy as senior advisor John Negroponte, former U.S. Deputy Secretary of State and Ambassador to the United Nations, has joined Greenwood Energy as senior advisor and board member. Negroponte will provide strategic advice and senior counsel to Greenwood&rsquo;s management as it continues to build its platform of investment in both the renewable fuel and clean energy sectors. Founded to repurpose industrial waste into fuel pellets, Greenwood Energy is now a growing provider in North America that incorporates a clean power division deploying the latest research in fuel cell technology and energy efficiency. Negroponte also serves as an advisor to the board for the Libra Group, Greenwood&rsquo;s parent company, which has additional renewable energy interests in EuroEnergy, the European operator of wind farms, solar parks and biomass plants.&nbsp;
 DP CleanTech expands into the UK biomass market DP CleanTech has set up an office in Wolverhampton, U.K., the company&rsquo;s fourth strategic investment in the past year. The announcement follows the recent opening of new offices and manufacturing facilities in Thailand and Poland. DP CleanTech executives expect the U.K. market to be promising because of its energy initiatives, including the Renewable Heat Incentive. The world's largest straw-fired plant, a 38 MW facility in Ely, Cambridgeshire, uses DP CleanTech&rsquo;s highly acclaimed straw-firing technology.&nbsp; Founded in 2004, DP CleanTech designs, engineers, manufactures and commissions biomass and waste-to-energy power plants, providing complete solutions for turning waste materials into clean energy. Partners introduce gasification burner system Green Clean Heat of Newton, N.H., and Nord Energy Systems, Rowayton, Conn., have formed a joint venture aimed at providing economical, high-efficiency heating systems. The Nord Energy Gasification Burner is a heating unit designed to replace oil burners in furnaces and boilers used in residential and small commercial applications. Green Clean Heat will provide ready-to-install systems for schools, municipal buildings, hospitals, condominiums, and other commercial and industrial facilities. The Gasification Burner uses computer controls to ensure the high-efficiency gasification and combustion of biomass resources such as pellets and wood chips. Nord Energy Systems is a research and development organization specializing in high-efficiency biomass-based heating and power generating systems.
 Ineos Bio chooses AMEC as license support engineering firm Ineos Bio has selected AMEC, an international engineering company, to be its global license support engineering firm, as the company rolls out its licensing program for the Ineos Bio advanced bioenergy technology. AMEC will work with Ineos Bio to develop engineering design packages for future Ineos Bio technology licensees.&nbsp; AMEC was selected following an extensive evaluation process of qualified global engineering firms. The value of the contract has not been announced. AMEC&rsquo;s experience in similar markets, along with its dedication to sustainable business practices makes it an ideal license support contractor for Ineos Bio. The two companies are currently working together on the first commercial-scale facility to deploy the waste-to-bioenergy technology. Slated to come online this year, the Indian River BioEnergy Center in Vero Beach, Fla., will produce 8 million gallons of advanced cellulosic ethanol and 6 MW of power, while providing a solution for dealing with waste that would normally end up in a landfill.&nbsp; Koller joins Vecoplan as sales, project management engineer Lars Koller joined Vecoplan LLC, a size-reduction technology supplier, as a sales and project management engineer. Koller earned an advanced mechanical engineering degree from the University of Hannover, Germany, in 2001. He brings 10 years of engineering experience from Focke &amp; Co., having first worked in research and development at Focke&rsquo;s Verden, Germany, headquarters and then as manager of the design department at Focke&rsquo;s Whitsett, N.C., facility. Koller&rsquo;s responsibilities will include coordinating the design and development of turnkey shredding systems for the recycling sector. He will also oversee the manufacturing and implementation of his projects once the engineering phase has been completed, ensuring continuous quality control throughout the process.

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The third annual Pacific West Biomass Conference &amp; Trade Show, held in San Francisco, Calif., Jan. 16-18, welcomed more than 400 attendees, exhibitors, and presenters to examine and discuss the region&rsquo;s most pressing, innovative and challenging bioenergy industry issues and ideas.&nbsp;&nbsp;
 Keynote speaker Mike Hart, CEO of Sierra Energy, emphasized the versatility of synthesis gas, and how the value of biomass&mdash;particularly municipal solid waste (MSW)&mdash;will drastically increase over the next couple decades.
 Hart believes trash will become a valuable commodity as waste conversion technologies become widely implemented.&nbsp; &ldquo;As time goes on, we&rsquo;re going to be buying it and making competitive bids,&rdquo; he said, adding that feedstock flexibility will become a dominant factor in the biomass energy industry.
 Hart sees a game changer on the horizon for feedstock procurement: suppliers paying biomass plants to take feedstock, rather than plants paying for their feedstock. As trash becomes a commodity, companies that designed technologies based on a feedstock that was typically free will realize the economics of their system no longer work. &ldquo;This is because people with waste products will realize they have another product to sell,&rdquo; Hart said. &ldquo;My expectation is that we will see this with garbage.&rdquo;
 He added that landfills will become a thing of the past because of carbon taxes, decreased tip fees, and local governments looking for ways to turn waste into a profit, or reduce the substantial cost of paying somebody to take it.
 Following Hart, the event&rsquo;s opening general session featured current trends in financing mechanisms. The panel, titled &ldquo;Financing Strategies for Biomass-Derived, Energy, Fuels and Chemicals in a Tight Capital Market,&rdquo; offered three very different investment perspectives.
 Bill Lemon, senior vice president of investment banking at Source Capital Group Inc., opened the discussion by noting that biomass developers are in the big leagues now, and attracting investment will be a challenge. &ldquo;There is a lot of money at stake, lots of technical complications, political complications, and lots of headaches,&rdquo; he said. &ldquo;But, the basics of good projects haven&rsquo;t changed.&rdquo;
 Different types of investors are attracted to different aspects of a project, Lemon said, and developers need to understand the type of investor they are hoping to attract.
 John May, managing director at Stern Brothers and Co., said biomass projects have traditionally trailed behind other types of renewable energy when it comes to access to capital. He also noted that the bond market is wide open. &ldquo;It&rsquo;s a trillion dollar market, it&rsquo;s very liquid&hellip;and it&rsquo;s a market that will look at projects that are trying to get technology commercialized&hellip;or trying to scale,&rdquo; he said.
 New biomass conversion and energy projects will seem risky in an investor&rsquo;s eyes, May continued. &ldquo;The issue is how can we attack the perception of that risk, and how do we mitigate that risk,&rdquo; he said. &ldquo;I think [the reason] we haven&rsquo;t gotten that many biomass projects financed with non-recourse debt and with traditional institutional equity is we haven&rsquo;t solved that problem yet.&rdquo;
 Paul Tantillo, managing member of Enervation Advisors LLC, an alternative energy advisor and investor, finished up the general session describing several ways a company can better attract interest from his firm and other potential investors. Most important, he said developers should be bold, but also honest and direct. &ldquo;Don&rsquo;t sugarcoat the situation,&rdquo; he said. &ldquo;If the pitch seems too good to be true, it probably is.&rdquo;
&mdash;Anna Austin and Erin Voegele

SETTING THE STAGE: Speakers on the first general session panel at the Pacific West Biomass Conference & Trade Show included (from left) moderator Bruce Manchester, McGladrey Capital Markets LLC; John May, Stern Brothers & Co.; Bill Lemon, Source Capi

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More than 400 professionals gather to talk biomass in The City by the Bay 

Golden Gate to Biomass  

The Pacific West Biomass Conference &amp; Trade Show kicked off with a day-long tour that featured one of the country&rsquo;s most innovative wastewater treatment plants, as well as an on-farm dairy digester power system.
 The city of Santa Rosa&rsquo;s 21-million-gallon-per-day Laguna Wastewater Treatment Plant houses four 1-million-gallon anaerobic digesters that turn sludge separated from the water into Class B biosolids, which are sent across the street to a facility that transforms them into Class A biosolids.
 Biogas emitted from the digesters is blended to a 50/50 mix with utility gas and is then combusted by three 0.8 MW engines to create a total of one-third of the plant&rsquo;s electrical needs. A combined-heat- and-power (CHP) project to replace the existing facility is expected to be finished in December, according to Cayden Hare, city intern and aquatic biomass program lead researcher.
 When that&rsquo;s complete, four 1 MW engine generators will burn the biogas, and serve as standby power for the plant&rsquo;s needs during utility outages.
 Uniquely, some of the plant&rsquo;s wastewaster is diverted to six channelized wetlands, where aquatic biomass cleans the water, absorbs pollutants and is allowed to grow. The biomass is eventually transferred into two 1,500-gallon vertical anaerobic digesters, Hare explained, along with waste glycerol and winery leaves. The resulting biogas is used to power small cars used on site, according to Hare, and the remaining half of the materials are composted.
 At the Giacomini Dairy at Point Reyes, Calif., tour attendees viewed an ambient temperature, covered lagoon anaerobic digester fueled with manure from about 350 cows.
 With financial aid from the USDA and other government grant programs, the digester has been operating 24/7 for the past two years, according to digester technician Douglas Williams. Biogas emitted from the digester is captured through a gas collection system and then piped to a gas handling system.
 Electricity produced from the biogas via an 80 kilowatt generator powers the farm&rsquo;s operations, and excess electricity is purchased by electric utility PG&amp;E, according to Williams. &ldquo;There&rsquo;s also a CHP aspect, as heat coming off the engine is used in the dairy and creamery,&rdquo; he said.
&mdash;Anna Austin

'TANK' IT ALL IN: Anaerobic digesters at the Laguna Wastewater Treatment Plant process aquatic biomass, waste glycerol and winery leaves.

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Conference tour visits wastewater treatment plant, dairy digester


Digesting California's Innovations

During the second-day plenary session of the Pacific West Biomass Conference &amp; Trade Show in San Francisco, the hot topic was wood-to-energy carbon cycles and their relation to forest management. Session speakers presented and dissected new research and the most recent studies relating to biomass carbon accounting, including a widely publicized report authored by Oregon State University College of Forestry researchers. Titled &ldquo;Regional Carbon Dioxide Implications of Forest Bioenergy Production,&rdquo; the study concluded that production of bioenergy from U.S. West Coast forests would increase carbon dioxide emissions from 2 to 14 percent over the next 20 years.
 Although not one of the study&rsquo;s authors, presenter Norm Johnson of the same OSU department discussed the findings, pointing out that the key phrase repeated in media headlines was &ldquo;biofuel production will increase carbon emissions.&rdquo; &ldquo;Now that&rsquo;s counter to what has been said and understood by many people, including myself,&rdquo; he said.
 Emphasizing that the report was performed by top-of-the-line scientists, Johnson referred to it as &ldquo;wild science,&rdquo; but pointed out that if researchers didn&rsquo;t do studies such as this one, people might still believe the sun revolved around the earth. &ldquo;It opens up new avenues of thought, analysis and controversy, and it&rsquo;s not going away soon; it&rsquo;s not easily dismissed, it&rsquo;s a serious work.&rdquo;
 However, the report has a very specific point of view and looks out only 20 years&mdash;a very short time&mdash;and the outcome would be different if it accounted for a more expanded time period, according to Johnson. &ldquo;They don&rsquo;t look at the longer picture, and it&rsquo;s hard to argue that harvesting trees reduces carbon emissions in the short term, unless it results in greatly reduced mortality in the forests due to various threats, or through selection of building materials,&rdquo; he said. &ldquo;We have shorter-term goals that are important, and we&rsquo;re headed into a pretty intense period of discussion of what all this means.&rdquo;
&nbsp; Joining Johnson on the panel were Jeremy Fried, research forester at the U.S. Forest Service Pacific Northwest Research Station, and Bill Stewart, cooperative extension specialist at the University of California&ndash;Berkeley.
&mdash;Anna Austin

EXPLAINING EMISSIONS: Norm Johnson speaks to conference attendees about wood-to-energy carbon cycles. 


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Conference general session hashes out bioenergy carbon cycles

The Carbon Conversation 

Ask Markus Huwener, former investment banker from Germany and now CEO of First Climate, which biomass feedstock is best for power or thermal energy generation, and he might first tell you about First Biomass.
 First Climate is a carbon funds management company that has invested roughly $309 million in emissions reductions technology. Formed through an Australian joint venture between First Climate and Spar Capital, First Biomass functions as an equity investment fund for pelletizing operations across the world.&nbsp;
 It doesn&rsquo;t matter what the biomass resource is. Huwener and his team at First Biomass plan to utilize pellets made from woody residues, straw, bagasse, rice husks and more. The team views Europe as a great offtake user for its pellet supply, but the company also sees China and Japan as intriguing users. The company&rsquo;s strategic investment plan is simple: acquire, hold, manage and trade interests in a portfolio of biomass pellet production investments, all while keeping that portfolio diversified by source biomass, end contractor and geographic location of plants. The company has already made investments in nearly 25 different pellet projects.
 &ldquo;Over the past several years, we have seen a lot of biomass projects that failed due to one or another factor,&rdquo; Huwener says. &ldquo;The main challenge for First Biomass would be to originate good, solid projects.&rdquo; That means projects located in favorable areas that provide a sufficient source of feedstock and can be managed by a proven professional team. Although Huwener&rsquo;s perspective on creating a successful biomass feedstock supply chain seems to meet the status quo of project development in the biomass sector, his company&rsquo;s willingness to overcome the unfavorable capital market conditions might be the main lesson.
 &nbsp;Unfortunately, the pellet plants that would have supplied the demand of Japan or Europe are off the table. Instead, First Biomass has embarked on a $100 million pre-initial public offering (IPO) funding round that will net long-term investors a cash flow return per year of 15 percent, in advance of another shot at a successful IPO slated for 2013. Given that, and the upward trajectory of pellet demand in Europe, the company&rsquo;s unwillingness to test the IPO market to raise the equity needed to create a global supply chain might be a good thing after all.
&mdash;Luke Geiver

STOCKPILE UTILIZATION: First Biomass will help supply global bioenergy demand, using sugarcane bagasse stockpiles. 

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First Biomass aims to be a global pellet supplier

Global Supply Chain Glory   

A new partnership program recently launched by Genencor aims to help the protein and enzyme giant &ldquo;establish something that hasn&rsquo;t been here before,&rdquo; according to Stan Mainzer, vice president of business development. That &ldquo;thing&rdquo; Mainzer refers to can be anything, as long as it involves water, energy or air. Mainzer explained the idea behind that partnering program, GNext, and what it might mean for his company and those that are fortunate enough to partner.
&ldquo;GNext is an open innovation platform that offers Genencor a route to expand into fields of air, water and energy&mdash;a few of the major societal needs of the 21st century,&rdquo; he says. To do so, Mainzer and his team are looking for big, medium or even startup companies &ldquo;that have truly breakthrough or disruptive solutions.&rdquo; Those companies from his estimations will be in need of Genencor&rsquo;s suite of services, which include discovery, engineering, scale-up and distribution of enzymes, proteins or microorganisms used for industrial applications.
As an example of a company that Genencor has already worked with through the GNext concept, Mainzer points to DuPont Danisco Cellulosic Ethanol, which used Genencor&rsquo;s enzyme technology to produce fermentable sugars at a competitive price point on a commercial scale. The work of Genencor with DuPont has led the joint-venture to Nevada, Iowa, where a 27 MMgy cellulosic ethanol facility is scheduled to break ground in 2012. But projects on that scale aren&rsquo;t the only kinds the GNext platform will take on.
&ldquo;We are currently working with several startups that require a protein or enzyme as a key element of their development. These companies, for example,&rdquo; he says, &ldquo;discovered that engineering, scale-up and supply of enzymes or proteins is beyond their expertise or capabilities and appreciate Genencor&rsquo;s reliability and competency in providing the needed technology.&rdquo;
For Mainzer and his GNext team, the goal for the future is simple: &ldquo;Develop a portfolio of partner companies who are developing solutions to the big societal needs in the areas of air, water and energy.&rdquo; Why? &ldquo;We&rsquo;ve learned that close collaboration or partnership drives success more easily than attempting these challenges alone,&rdquo; he says. &ldquo;Finding the right partner with a shared vision, the complimentary experience and the desire to win are a few keys to success.&rdquo;
Although the idea in the bioenergy world that the most efficient and economical approach to making a project reach commercialization is through a partnership, Mainzer also puts it very bluntly. &ldquo;We are looking for people with ideas from the outside to challenge us.&rdquo; To contact the GNext team, visit Genencor&rsquo;s GNext webpage.&nbsp;
&mdash;Luke Geiver

A new partnering program could help Genencor, and you

Genencor Wants a Challenge

To say that there was a sense of excitement or a positive buzz at the 2011 Algae Biomass Summit would be a gross understatement. Spending four days in Minneapolis amidst the largest and most impressive gathering of algae experts in academia, private business and government institutions, would convince anyone that in the algae industry today there is a whole lot more to the story than buzz or excitement. As the summit revealed, the industry is shifting to a more serious context and real-time vision of what the algae industry is, and what it has already accomplished, more so than the simple promise of dreams. More than anything, in those four days of talking with people, listening to them, admittedly overhearing conversations, it became clear that this sector is best described by two words, one of which is diversity. And the executives of five well-established algae companies exemplify the vast diversity that exists.
On a featured panel designed to update attendees on the state of several major algae companies, one executive explained plans to farm and refine algae on a massive scale to provide liquid transportation fuel; another provided proof that co-locating an algae growing operation at an ethanol plant works; and yet another executive detailed an operation that simply uses algae to produce ethanol.
From the number of different utilization approaches alone, the outlook for 2012 cannot be defined by one pathway as that feature panel showed, rather it needs to include everything from nutraceutical use to fish feed to algae crude oil. &ldquo;It&rsquo;s going to be a very interesting story in 2012,&rdquo; said Paul Woods, founder of Florida-based algae-to-ethanol producer Algenol, adding that it will be an exciting year. Even so, the real story of the algae industry today and tomorrow wouldn&rsquo;t be complete without the other word that best describes the general mood during the conference: opportunity. Payback Potential
Cynthia J. Warner, former BP executive and now president of Sapphire Energy, says there is nothing like feeling the actual vibration of 200,000 barrels a day of petroleum flying by you in a pipeline. Part of the reason she left petroleum and joined the algae team at Sapphire was because she realized the oil industry was not only maturing, but also depleting. &ldquo;The bottom line is that we have a need for a sustainable source of liquid transportation fuel to supplement the world&rsquo;s supply of crude oil,&rdquo; she said.
According to Warner, the world crude oil demand of today is roughly 87 million barrels per day&mdash;the U.S. uses 20 million of those&mdash;&ldquo;a number that is a lot like the national debt,&rdquo; she explained. &ldquo;You can&rsquo;t actually relate to it because it is just so big.&rdquo; By 2030, demand will reach roughly 115 million barrels per day, making the payback potential &ldquo;enormous,&rdquo; she said.
Sen. Al Franken, D-Minn., got a loud cheer from the crowd during his opening remarks about the need for new energy. &ldquo;We need to stop subsidizing dirty energy,&rdquo; Franken told the audience. Sen. Amy Klobuchar, D-Minn., also provided a clear vision regarding algae&rsquo;s potential in relation to fossil-based energy. &ldquo;Americans have shouldered these costs (oil subsidies) for too long,&rdquo; she said. &ldquo;Those companies no longer need those tax breaks and we can&rsquo;t afford them with the debt we are facing. This isn&rsquo;t about whether those oil companies deserve a profit. It&rsquo;s a question about whether the American people should pay the cost of providing preferential tax treatment to the five largest oil companies in the U.S., which have racked up almost $1 trillion in profits over the last decade.&rdquo;
Klobuchar insisted that if we are going to develop the next generation of biofuels and biobased products to break our dependence on foreign oils, &ldquo;our tax code needs to reflect that priority.&rdquo; In addition to a revamped tax code that would help algae companies compete with big oil, she also said the continued institution of the RFS2, in which algae-based advanced biofuel would qualify, will help develop not just algae, but the future of America&rsquo;s energy use.
The global consumption demand that Warner pointed out along with the political perspective from both Minnesota senators were just two of many areas in which the idea of opportunity showed up. Amy Bann, director of environment and aviation policy for Boeing spoke about the global aviation powerhouse&rsquo;s need for algae. &ldquo;Algae is really something that Boeing is committed to,&rdquo; she said. &ldquo;But not just Boeing, really the whole aviation industry, and so keep us in mind.&rdquo; For Boeing, she added, &ldquo;this is the alternative solution and we are going to keep pursuing it.&rdquo;
Why? For one, Bann explained, companies like the sustainability aspect of algae &ldquo;because you avoid some of the issues that happen with other pathways.&rdquo; She also explained the infrastructure is already in place to use algal biofuels. &ldquo;What I want for you to keep in mind as you produce algae and you look for end markets for your product,&rdquo; Bann said, &ldquo;is that there is not much here that needs to be done. There are not that many airports, the airlines are very united and there is a demand for this, and you don&rsquo;t need to change infrastructure.&rdquo;
But the opportunity for algae is more than the demand created from a global fossil-fuel source on the decline, political support or even the simple fact that aviation companies looking for an alternative energy source don&rsquo;t have the option of wind or solar power. As Life Technologies&rsquo; new media kit shows, algae companies now have the ability to skip past the tedious task of finding consistent testing methods and developmental lab tools. Dan Schroen of Life Technologies, a global synthetic biology company, says that his team&rsquo;s use of what it calls UCI, user centered innovation, has helped them develop a suite of tools ranging from media growth kits to algae strains to DNA vectors available to everyone from lab directors to industrial scientific companies such as Sapphire to find the next breakthrough. &ldquo;A lot of really smart researchers were spending more time on that&rdquo;&mdash;finding consistent and dependable testing tools&mdash;&ldquo;then developing the next breakthrough,&rdquo; Schroen says. Now, after research in the field and time spent with experts such as Stephen Mayfield from the University of California San Diego, Schroen is developing a kit that would help anyone interested in algae development. A simple catalog order can provide researchers with consistent products, including robust strains that have not been damaged by genetic drift, and vector maps that are up to date, all of which can be customized for specific strains, making the path to commercialization much quicker. How to Get Paid
Although the algae industry outlook for 2012 is based on an ever-growing list of fish food providers, nutraceutical ingredient providers or biofuel producers that are diverse in their vision and approach, all in combination with an overhanging cloud of opportunity, none of it matters if those visions don&rsquo;t produce a profit. To make sure those in the business don&rsquo;t mess up the chance for a positive financial return before their time comes, there are companies like Fortune 500, led by Bill Shireman, president and CEO. Shireman&rsquo;s company helps private companies join up with their &ldquo;enemies,&rdquo; as he said during his talk at the summit, helping to &ldquo;identify risks and find solutions.&rdquo;
One of the major issues facing algae companies and their future ability to turn a profit, he explained, is that &ldquo;the public has no clear perception about algae at this time.&rdquo; But, &ldquo;it will be determined by the actions that you take from here on out.&rdquo; The path from here, he said from experience with other companies, &ldquo;will take one of two narratives.&rdquo; The first narrative looks good, and includes the perception and truth about algae regarding energy, water consumption, CO2 reuse, and the ability to reduce our reliance on foreign oil. The second, however, is much bleaker, and includes the ideas that algae could someday cause more global harm than good, or it will be overtaken by global companies and it will induce major water-use problems.
&ldquo;Those are the two narratives that you can choose from, and the narrative that gets the most play will depend on how well you engage with the stakeholder community right now,&rdquo; he said. It also depends on how well algae companies perform &ldquo;as an industry across the issues that are raised in those narratives.&rdquo;
Shireman&rsquo;s advice is to take all issues seriously, recognizing each before it happens. &ldquo;The big mistake,&rdquo; he said, &ldquo;is when you counterattack,&rdquo; instead of acting first.
Tensie Whelan, president of the Rainforest Alliance, also agreed with Shireman, pointing out the importance of stakeholder involvement early on, as well as the development of common sustainability standards created by all stakeholders as a common point of reference when speaking about an algae-related business.
There are two times when a company should engage with stakeholders: pre-crisis and post-crisis. And there are two models of engagement that work: a more formal stakeholder meeting where a company can pitch itself, or one-on-one conversations with potential stakeholders. The formal approach, although successful, limits a company to the stakeholders that it thinks are right, while the less formal approach allows a company to feel out who the right partners might be based on common interests provided by both parties. When a crisis hits, those stakeholders with a shared interest will be there to help provide positive feedback and positive perspective.
As Tom Byrne, owner of Byrne and Co. Ltd., mentioned at one point during the conference, it might not always matter how well an algae company has aligned its stakeholders, proven out technology or addressed outside issues. &ldquo;You will hear some things you want to hear,&rdquo; he said, &ldquo;and you will hear some things you don&rsquo;t.&rdquo; Given Byrne&rsquo;s perspective, combined with a history of algae companies making big claims without providing results, not to mention recent milestones and small achievements by several of the companies at the summit that have broken ground, proven technology at some level, or achieved what they said they would, the words of Mark Allen, vice president of Accelergy Corp., could be taken two ways. What he said during his introduction of Franken might be, just as Byrne said, something you want to hear, or something you don&rsquo;t. &ldquo;We are on the verge of breaking out on a global scale,&rdquo; he said. For some, this rings positive. Others may hear it as just another statement from an emerging industry perpetually stuck on the verge. Author: Luke Geiver Associate Editor, Biorefining Magazine (701) 738-4944 <a href="mailto:lgeiver@bbiinternational.com">lgeiver@bbiinternational.com</a>

A review of the Algae Biomass Summit and the state of the industry

Four Days in the Algae Epicenter

There was a time about 30 years ago after two debilitating energy crises of the 1970s when bioplastics represented 15 percent of the global plastics industry. Today, bioplastics account for less than 1 percent of the 230 million tons (460 billion pounds) of polymers generated globally. Why? It comes down to price and performance, according to Keith Masavage, chief of strategy and operations for Biobent Polymers, a division of Univenture Inc., headquartered in Marysville, Ohio. The company produces a line of biobased polypropylene and polyethylene resins from inedible soy meal using a Battelle-developed process. &ldquo;When people did start feeling more pressure from ecogroups, lobbyists and consumers to have more ecofriendly products, people came out with [bioplastics], but they always tended to have a fairly high price tag and they tended to be bioplastics that were made with just fillers,&rdquo; Masavage tells Biorefining Magazine. The price was high, the performance was low, and the market shrunk. &ldquo;The real panacea for this industry is a bioplastic that has some level of renewability and has performance on par with petroleum-based resins and can do so with competitive prices,&rdquo; he says. &ldquo;We&rsquo;re trying not to have to invent or expose people to new technologies or new processing techniques that have never existed before. We literally want this to be a kind of a drop in-and-go. I think that&rsquo;s really where the industry needs to go.&rdquo; Enter today&rsquo;s bioplastics: not just crude fillers, but sophisticated biobased polymers that match petroleum plastics in chemistry and performance.&nbsp;
As the price of oil shows no signs of declining, ancillary factors like consumer appeal for sustainable products and packaging, human health concerns coupled with favorable governmental policies likely will drive a surge in global demand for bioplastics in the coming year. As a result, the next decade will see a fundamental shift in global polymer production with a new set of biobased capacities to come online. In a report released earlier this year, industry association European Bioplastics forecasted global bioplastic production capacity to surpass 1 million tons this year with production to more than double from 2010 to 2015. In addition, the report indicated that bioplastics would total 1.7 million tons by 2015, up from around 700,000 tons in 2010.
Central to this growth is the rapid expansion of bioplastics into an ever-increasing number of applications, ranging from beverage bottles in the packaging segment to keyboards in the consumer electronics segment. Depending on the application, the different types of bioplastics are processed in polymers that are either biodegradable such as starch-based plastics or polyhydroxyalkanoates (PHAs) and/or biobased, nonbiodegradable commodity plastics such as biobased polyethylene and polyethylene terephthalate (PET).
According to Massachusetts-based global market analyst firm BCC Research, the global biodegradable polymers market is expected to reach 932 million pounds yet this year and increase to 2.5 billion pounds by 2016 at a compound annual growth rate of 22 percent for the five-year period. The market reached 771 million pounds in 2010. The packaging segment accounted for 70 percent of the market in terms of total volume in 2010. This sector reportedly will reach 656 million pounds this year and should increase to 1.7 million pounds by 2016, according to BCC Research.
Although the outlook for bioplastics looks promising, cumulative annual projected growth rates for bioplastics should be taken with a grain of salt due to its size relative to the petrochemical-based polymer market, according to Jim Lunt, managing director for Jim Lunt &amp; Associates LLC, a consultant firm that specializes in the polymer, fiber, foams, thermoplastic elastomers, films and molded products industries headquartered in Wayzata, Minn.
&ldquo;The reason that you&rsquo;re seeing such high growth rates goes back to the fact that the industry is so small,&rdquo; Lunt explains, providing the applied analogy, &ldquo;If you have one penny and you make two pennies, then you&rsquo;ve grown 100 percent.&rdquo;
Market Share Showdown
According to Lunt, the existing conventional plastics market is divided into five primary segments: polypropylene, polyethylene, polystyrene, PET, thermoset urethanes and thermoset polyurethanes, all of which are becoming targets for biomaterials. The first-generation of bioplastics like NatureWorks LLC with its biobased polylactic acid, and starch-blend resin manufacturers like Cereplast Inc., Novamont, Biome in the United Kingdom, to name a few, are dominating the bioplastic market, accounting for nearly 90 percent of the entire bioplastic market combined between them, according to Lunt.
NatureWorks currently owns and operates a 300-million-pound-per-year bioPLA manufacturing plant in Blair, Neb., where it produces its trademarked Ingeo brand of bioplastic. Now 50 percent owned by PTT Chemical Public Co. Ltd., Thailand&rsquo;s largest chemical producer, Steve Davies, NatureWorks&rsquo; global director for marketing and public affairs, says the company has its sights set on building a second PLA production facility together with PTT Chemical in Thailand, slated to come online by 2015.
&ldquo;With our current growth&mdash;20 to 30 percent this year&mdash;it&rsquo;s clear to us we need more capacity to meet the market demand in the next two to three years,&rdquo; Davies says. While bioPLA has established a global presence as NatureWorks&rsquo; first platform, Davies says, &ldquo;We never intended that being all that we look at.&rdquo;
Another major bioPLA contributor is Dutch-based Purac, which continues to make strides in the global market. Purac, a subsidiary of global bakery ingredients supplier CSM, currently has five lactic acid production units globally, including a facility owned and operated by Purac in Blair, Neb. At a capacity of 150 million pounds per year, the plant produces lactic acid through a sugar-based fermentation process. Previously, the Nebraska facility was a joint venture between Purac and Cargill&rsquo;s North American Corn Milling Division.
According to Francois de Bie, Purac&rsquo;s global marketing director of PLA and biobased building blocks, the company saw rapid growth of PLA-based products this year and expects to see increased growth in 2012, much of which is expected to occur in Europe. &ldquo;For 2011, the growth versus 2010 was in excess of 50 percent,&rdquo; de Bie says. &ldquo;With many key brand owners now actively using PLA, we expect this high growth rate to continue.&rdquo;
For Cereplast, the company believes regulatory restrictions in areas such as outlawing plastic bags will drive global demand for bioplastics. Cereplast entered into seven distribution agreements in Europe since the beginning of 2011. According to Nicole Cardi, vice president of marketing and communications, the surge in demand for bioplastic materials in the region has been fueled by new governmental policies, which started with restrictions on the use of traditional plastic bags and is now moving toward changes in legislation on use of flexible and rigid packaging. &ldquo;As these laws are passed, European manufacturers need to identify alternatives to comply with these new mandates,&rdquo; Cardi says, adding that the U.S. could follow suit soon. &ldquo;The ban on plastic bags is becoming more common and widespread in the U.S. That said, an increasing number of cities and municipalities will need to consider alternative materials for providing bags to their customers.&rdquo;
The extension of first-generation PLA and starch blends, according to Lunt, are biobased PHAs, such as what Telles, a joint venture between Archer Daniels Midland Co. and Metabolix, is producing. The companies have a 50,000-ton-per-year plant in Clinton, Iowa, where it manufactures its Mirel brand of PHA-based polymers. Lunt thinks PHAs will struggle heading into next year as the average selling price for PHA is about $2.50 per pound. In contrast, PLA sells for around 85 cents to $1.10 per pound in the U.S.
The remaining 10 percent of the bioplastic market, according to Lunt, consists of &ldquo;others.&rdquo; Those that fall under this category would be DuPont&rsquo;s trademarked brand of renewable polytrimethylene terphthalate (PTT), Sorona, Coca-Cola-Heinz&rsquo;s Plant Bottle, BASF&rsquo;s EcoFlex, Brazilian oil and gas firm Braskem&rsquo;s sugarcane-derived polyethylene, soy-based polyol for making ecofriendly poleurethanes, and so on. Trends to Watch
Until now, most plastics have been in single-use compostable and disposable products. In fact, statistics from European Bioplastics suggest that durables will account for almost 40 percent of bioplastics this year compared with approximately 12 percent in 2010. With the advent of biobased polyethylene and some of the soy-based polyols, Lunt expects to see an increasing amount of durable products coming to market in 2012. &ldquo;The trend in the bioplastics industry will be to move from these single-use durables and PLA, which will still exist and capture markets, toward a trend of making an existing plastic from renewable resources cost-effectively that&rsquo;s exactly the same as the plastic people use today,&rdquo; Lunt says.
The inertia anticipated to thrust this trend, according to Lunt, will be due in large part to the ever-growing synergy between the bioplastics segment and the advanced biofuels and biochemical industries. For example, Colorado-based isobutanol developer Gevo Inc. formed a partnership with Torray Industries Inc. to produce paraxylene, a direct precursor to terephthalic acid production, which accounts for about 70 percent of PET&rsquo;s monomer component. Gevo also formed a partnership with Lanxess to produce biobased butyl rubber. Another is Madison, Wis.-based Virent Energy Systems Inc., which announced earlier this year it had successfully converted plant sugars into biobased paraxylene at its 10,000-gallon-per-year demonstration facility in Madison. The company said it intends to have commercial-scale paraxylene production online by 2014.
Another side effect brought on by the tightening confluence between the bioplastic and advanced biofuel and biochemical industries is the myriad of new biobased chemical monomers in development that are aimed at replacing petroleum-derived chemicals with renewable molecules. Companies like Dutch firm Avantium have discovered a route using its furanics-based platform, called YXY, to make methoxymethylfurfural (MMF) and other hydroxymethlyfurfural (HMF) ethers from glucose and fructose. The company has another catalyst that transforms the ethers into furan-based dicarboxylic acid (FDCA), a biobased chemical that can be reacted with ethylene glycol to make polyethylene furanoate (PEF), which can be used as a renewable replacement for making PET. According to Avantium CEO Tom van Aken, FDCA can also be used to make polyamides, plasticizers and coating resins, adding that, &ldquo;everywhere you see terephthalic acid you can use FDCA basically as a green replacement for it,&rdquo; he says.
Other emerging biobased building blocks that could see increased visibility in 2012 for their biopolymer applications, Lunt says, include the rising interest in biobased succinic acid to make polybutylene succinate (PBS), which is compostable and can be blended with PLA and starch blends. Companies involved in this area include BioAmber, Roquette Freres and DSM, BASF and Purac, Myriant Technologies, PTT Chemical, Mitsubishi Chemicals and others. Not only can succinic acid be used to make PBS, it can also be used to make adipic acid, a valuable precursor for making 6,6 nylon, and for making butanediol. &ldquo;Succinic acid markets are already known and so is PBS, but they&rsquo;re not used a lot today. But if it were renewable and cost-effective, it will become a player,&rdquo; Lunt says.
With increased volumes of new biobased building blocks expected to contribute to the production of more biopolymers, several bioplastic resin manufacturers see bioplastic resin innovation driving away from using starch-based feedstocks to using second- and third-generation inputs such as algae. Both Cereplast and Biobent have conducted trial production runs using algae in their respective line of bioplastics and both look to continue this shift in 2012. Cardi says Cereplast is seeing an increased demand for resin grades that are suitable for durable applications such as with its line of Hybrid Resins. &ldquo;Cereplast algae bioplastics have the ability to absorb and minimize greenhouse gases from the industrial process, creating up to 45 percent fewer greenhouse gases than traditional plastics,&rdquo; she says, adding that the company has partnered with an accessories company that recently launched an entire line made from Cereplast&rsquo;s algae bioplastics.
Masavage says shifting to nonfood feedstocks like algae enables Biobent to not be tied exclusively to soy for its biobased resins. &ldquo;If the biomaterial contains a significant amount of protein, it will work in our process,&rdquo; he says. &ldquo;And guess what has a lot of protein? Algae. We can take algae and we can make resins out of it the same way we do soy meal.&rdquo;
Some, like Waltham, Mass.-based Novomer, see value in an abundant nonbiomass material for producing polyethylene carbonate and polypropylene carbonate, the result of reacting carbon dioxide with ethylene oxide and propylene oxide, respectively. According to Peter Shepard, executive vice president of polymers for Novomer, the company sees global opportunities for introducing coating resins based on low-molecular-weight polymers, noting that he envisions a potential application being the replacement of bisphenol A-based epoxy resins in can coatings.
&ldquo;There&rsquo;s no silver bullet to any of this,&rdquo; Shepard says. &ldquo;It&rsquo;s going to be a mix of solutions and a variety of technologies where each one will play a small role in improving the sustainability of how we conduct our lives.&rdquo; &nbsp;&nbsp;&nbsp; Author: Bryan Sims Associate Editor, Biorefining Magazine (701) 738-4974 <a href="mailto:bsims@bbiinternational.com">bsims@bbiinternational.com</a>

Why a surge in demand for bioplastics will drive increased volumes

Making a Dent in 2012 and Beyond

The biorefining sector reached an important new milestone this year with at least five companies undergoing successful initial public offerings (IPOs). As we move into the new year, members of industry will take another important step as significant quantities of commercial production begin to come online. According to Biorefining Magazine archives, more than two dozen companies around the world have announced they aim to achieve monumental new milestones next year. Some will develop demonstration-scale projects in an effort to prove out their technologies at scale. Others will break ground on commercial-scale plants. A select few will even bring commercial-scale capacity online. By the close of 2012, the landscape of the industry could be changing. As advanced biofuel and biobased chemical plants begin putting commercial quantities of product into the marketplace, the industry should gain a new air of legitimacy.
Successful IPOs from companies such as Codexis Inc., Solazyme Inc., Gevo Inc., Amyris Fuels LLC, and KiOR Inc. have defined the biofuels industry in 2011. &ldquo;Those companies all went public this year, and they went public to great, great success,&rdquo; says Advanced Biofuels Association President Michael McAdams. &ldquo;That&rsquo;s a good sign for the future.&rdquo; Paul Winters, director of communications at the Biotechnology Industry Organization, adds that those IPOs not only demonstrate the maturation and progress made by the biorefining sector, but it represents a larger movement in the industry beyond biofuels as companies making renewable chemicals are also represented.
These IPOs are critically important to those individual companies as well as the industry as a whole, says Cobalt Technologies CEO Rick Wilson. &ldquo;To run a startup, you need financing,&rdquo; he says. &ldquo;The people who invest in these early-stage companies do so realizing that many of them will fail. But, the ones that succeed will make a lot of money. Without an IPO they could never be convinced that there is a chance they could see their money. So, an early-stage investor would put their money in now that they have confidence the IPO window is open. The fact that there are going to be examples and cases where they will be able to get 10 times their money is only going to serve further investment in this segment.&rdquo;
Gevo CEO Pat Gruber says when Gevo went public, it demonstrated that a really good public offering could be done in this space. &ldquo;We 10-times oversubscribed,&rdquo; he says, &ldquo;and that gave confidence to the whole sector. No one really knew if there was an investment appetite for our kinds of businesses. Now, with us, Solazyme, KiOR and the rest, I think there probably is. That offers up a new way of raising money. That&rsquo;s good.&rdquo;
The success of the industry&rsquo;s first IPOs isn&rsquo;t all that defined this year. Gevo President Chris Ryan says another factor is the level of commercialization the sector has achieved. &ldquo;Up until this year, the only thing the world had seen was a bunch of joint development agreements,&rdquo; he says. Members of industry have now begun to put the first real commercial supply agreements into place. For Gevo this is reflected in the commercial offtake agreements for its biobutanol product. &ldquo;It&rsquo;s quite impressive, I think, that we have the majority of our first two plants sold out,&rdquo; Ryan says. &ldquo;And these aren&rsquo;t little plants.&rdquo;
James Iademarco, vice president of biobased chemicals and materials at DSM N.V., adds that 2011 has also been marked by significant advancements in biobased chemical production technology. &ldquo;It&rsquo;s very exciting,&rdquo; he says, noting there has been movement on advanced technologies in biological, thermochemical, chemo-catalytic and other catalysis pathways. Jim Sturdevant, director of Poet&rsquo;s Project Liberty, says that dozens of companies around the world have been working for nearly a decade to develop cellulosic ethanol production technologies. Several of those companies are now progressing with plans for commercial deployment. &ldquo;I think it&rsquo;s probably fair to say, from an industry perspective, the technology has made great advances, and is in many cases ready to go,&rdquo; Sturdevant says.
While access to funding has been a particularly troublesome issue in the biorefining sector since the start of the global recession, Sturdevant says that seems to be turning around. &ldquo;The challenge for the last couple of years has been financing,&rdquo; he says. &ldquo;Part of the problem there is our economy itself and the reluctance of lenders to lend to innovative technologies.&rdquo; He notes there has been some success, however, thanks to the U.S. DOE and USDA loan guarantee programs, adding that &ldquo;some cracks have been forming in the wall of this financing barrier.&rdquo; Into the Future
While 2011 was a big year for biorefining, 2012 is promising some impressive developments. On an individual basis, companies such as Gevo have plans to roll out commercial production. On an aggregate basis, the entire sector seems poised to move ahead with funding, scale-up and production plans.
Funding in general, and IPOs specifically, will continue to be a defining force in the industry. &ldquo;My prediction is there are lots of companies teeing up to do an IPO, and I think the bar is going to get raised for IPOs considerably,&rdquo; Wilson says. While some have been able to file an IPO on what essentially boils down to a promise, Wilson says he thinks the expectations will change. &ldquo;I think we could see the requirement that a company that files an IPO has commercial production and is making money,&rdquo; he says, adding there may also be a more rigorous expectation that companies fully prove out a technology on the demonstration scale. In addition, he says he expects investors will be less interested in supporting companies that depend on government subsidies.
Iademarco outlines three things he expects to see next year, and all involve investment or funding. &ldquo;I think you are going to see a continual investment in biobased chemicals,&rdquo; he says, provided the financial markets stay relatively stable. &ldquo;I think you are going to see some of these companies that are venture-backed go public.&rdquo; He also says larger, established chemical companies, either downstream customers or incumbents, will become more active in making investments in these technologies.
BIO partners with another organization to produce a quarterly business outlook survey. It&rsquo;s sort of a business confidence index for the bioenergy and biorefining industry, Winters says. While the first two quarters of the year showed a high degree of confidence in continuing IPO activity, the most recent report showed a decline and noted that there was expectation within the business community that more financial activity would be present in the form of mergers and consolidation. Winters also points out that the IPO market fluctuates within the year, and that the latest report could simply reflect a seasonal shift in the market. For the past dozen years, he says, the third quarter has tended to be slow for the biotechnology sector. &ldquo;The fourth quarter of the year will probably see some pickup,&rdquo; Winters adds. While there is likely to be another round of IPOs next year, Winters notes that whether they are as large as 2011&rsquo;s will depend on the overall state of the economy and market, as well as the strength of the companies that come out for public offerings.
McAdams adds that market volatility could also have an impact in 2012. &ldquo;I know there are several more looking to go for it,&rdquo; he says of companies filing IPOs. &ldquo;I don&rsquo;t know whether the market volatility will lend itself to having a year in 2012 like we had in 2011, or whether, for that matter, we have enough companies that are far enough along to go public. I think there is more in the queue and I hope we can keep this momentum going. All the companies are rooting for each other, which is a great sign.&rdquo;
For those that went public this year, 2012 will be when they have to prove themselves. &ldquo;We&rsquo;re going to find out who is real and who isn&rsquo;t in terms of what they&rsquo;ve promised the street,&rdquo; Gruber says. &ldquo;And I hope everybody is real.&rdquo;
These companies, including public and private firms that announced commercial construction and operation activities planned for 2012 are being watched closely by everyone, Winters says. The U.S. EPA is keeping close tabs on the biofuel companies in order to fulfill its obligation to set the RFS2 compliance levels, and Congress, the U.S. DOE and USDA are monitoring many projects backed by federal funding so they can produce a return on investment for tax payers. Institutional investors, such as banks, are looking for proof the industry can succeed. &ldquo;Once success is demonstrated, they are willing to back construction of new projects,&rdquo; Winters says.&nbsp;
Iademarco also stresses how important it will be for biorefining companies to meet their production goals. &ldquo;You hear a lot of noise,&rdquo; he says. &ldquo;It is going to be interesting to see who is able to deliver on their promises and really get production going for customers, because that is going to be important anytime you have an emerging market. If biobased chemicals are going to be successful, these customers need to know that there are established, credible suppliers.&rdquo;
McAdams notes that the ability to meet stated goals will be important to the entire sector. &ldquo;I think the proof is in the pudding,&rdquo; he says. &ldquo;I think it&rsquo;s very important for companies across the industry to deliver the goods. I think we are going to see a number of companies next year really begin to deliver some significant volumes. That&rsquo;s not only good for them personally, it&rsquo;s good for the industry.&rdquo;
While IPOs and private investment opportunities will obviously be an important issue in 2012, McAdams stresses that the U.S. military&rsquo;s contribution to the industry will represent the No. 1 opportunity for the advanced biofuels industry next year; specifically, the funding that will come from the defense department under Title 3, the Defense Production Act. &ldquo;I think that is probably the No. 1 opportunity to see some cooperation and partnership to actually build a commercial facility between the government and private sector,&rdquo; he says. &ldquo;That is something that we all need to be watching, and rooting for and delivering. I&rsquo;d put it as No. 1 in the list of things to look for in 2012. I remain incredibly optimistic that we are going to be able to fund the $510 million and that will be the seed money to demonstrate that partnership.&rdquo;
Winters agrees that all branches of the U.S. military will be a driving force in the future of the biorefining industry. The military&mdash;not just the Navy, but every branch&mdash;has set goals for increased use of alternative energy, he says. &ldquo;The military is one of the best organizations in the world for setting goals and meeting them, and they have the expertise and knowhow to reach them.&rdquo;
The Farm Bill, in whatever form it becomes law, will also have a significant impact on the industry in 2012. The legislation is important because it has not only served as an R&amp;D driver, but also in production of biomass Winters says. &ldquo;We want to see the farm bill become a driver of the entire biorefinery range of products and uses for biomass,&rdquo; he adds.
In the current political environment, a lot of people are included to throw the baby out with the bathwater in terms of partnerships between government and clean energy technologies, McAdams says. That environment shows no signs of changing next year. &ldquo;I think it will be very important,&rdquo; he says, &ldquo;for those in the cleantech sector to remind policymakers of the great success that can result for partnerships between the federal government and new industry. For the federal government to walk away, particularly from advanced biofuels, at this time would be a really bad mistake. I think it would be a mistake where we would see our competition around the world in places like Brazil and China take the lead. I don&rsquo;t think this is a time in American history where we want others to take the lead on innovative and proprietary technologies that we invent right here at home.&rdquo; Author: Erin Voegele Associate Editor, Biorefining Magazine (701) 540-6986 <a href="mailto:evoegele@bbiinternational.com">evoegele@bbiinternational.com</a>
&nbsp;
<hr />
&nbsp;
Reaching New Milestones 2012 will bring many developments in biorefining. Here is a partial list of what&rsquo;s expected to happen next year.
&bull; Ineos New Plant BioEnergy&rsquo;s 8 MMgy cellulosic ethanol and 6 mW biopower plant is expected to be commissioned in April.
&bull; Solena Group Inc. is expected to begin construction on a 16 MMgy biojet fuel facility called GreenSky using Rentech&rsquo;s Fischer-Tropsch synthetic fuel technology platform in the U.K, with commercial operations scheduled for 2014.
&bull; DSM N.V. and Roquette Freres have plans to build a 10-kiloton-per-year commercial biosuccinic acid plant adjacent to an existing Roquette facility in Cassano Spinola, Italy, scheduled for operation in fourth quarter.&nbsp;
&bull; Cobalt Technologies and Rhodia will develop a demo plant in Brazil to produce biobased n-butanol from sugarcane bagasse. Cobalt also expects to complete its Alpena, Mich., demo plant to convert hardwood into biobased n-butanol, and the company expects to break ground on a commercial-scale facility.
&bull; Gevo Inc. is expected to begin operations at its first commercial-scale biobutanol plant, an 18 MMgy facility co-located with a corn ethanol plant in Luverne, Minn.
&bull; Fulcrum BioEnergy LLC recently filed for an IPO and is expected to complete construction on its 10.5 MMgy cellulosic ethanol plant and 16 mW biopower facility, Sierra Biofuels.
&bull; Novozymes partner Mossi &amp; Ghisolfi Group broke ground on a 13 MMgy cellulosic ethanol plant in Italy this year with production planned for next.
&bull; A joint venture between Novamont and Genomatica is working to complete a biorefinery at year&rsquo;s end to produce 40 million pounds of Genomatica&rsquo;s butanediol for use in Novamont&rsquo;s bioplastic products.
&bull; Elevance Renewable Sciences Inc. is retrofitting a Natchez, Miss.-based 80 MMgy biodiesel plant to produce specialty chemicals for use in personal care products, detergents, plastics, and lubricants, scheduled to be operational.
&bull; Dow Chemical Co. and Mitsui &amp; Co. Ltd. announced a new joint venture to produce biopolymers, the first phase of which will include construction of a new sugarcane ethanol plant in Brazil, followed by building adjacent ethanol-to-ethylene and polyethylene production facilities.
&bull; EdeniQ Inc. is developing a 2-ton-per-day cellulosic ethanol plant in Visalia, Calif., scheduled for operation in first quarter.
&bull; Independence Bio-Products aims to expand its algae demo plant in eastern Texas into a 390-acre commercial-scale facility.
&bull; ZeaChem Inc. is targeting development of a 25 MMgy commercial-scale facility using specialized microorganisms to convert biomass into fuel and chemical molecules.
&bull; UOP LLC, a Honeywell company, has begun construction on a pyrolysis demo plant in Hawaii that will convert forest residues, algae and other cellulosic biomass into transportation fuels. Initial production is expected to begin next year, with full operation in 2014.
&bull; Algae technology developer Heliae Inc. recently leased land to build a small commercial algae production facility near its headquarters in Arizona. Construction is scheduled to begin.
&bull; PepsiCo is scheduled to begin pilot-scale production of biobased polyethylene terephthalate.
&bull; Algae.Tec Ltd. is collaborating with the Manildra Group to construct a demonstration algae facility adjacent to an ethanol plant in Australia. The project could be operation by first quarter.
&bull; KiOR Inc. is developing an 11 MMgy renewable diesel plant in Columbus, Miss., which is scheduled to begin operations during second half of the year.

The biorefining sector is poised for commercial scale-up as funding strategies mature and production capacity grows

Hitting a New Stride

Developing effective biomass conversion technologies is only one component of building out the advanced biorefining industry. Those in the sector must also figure out ways to effectively and economically store, transport and deliver biomass to the many conversion facilities that will likely dot our national landscape.
A team of researchers at Texas A&amp;M University is working on a modeling system that is designed to add to that process. Wilbert Wilhelm, a professor of Industrial Engineering, and Stephen Searcy, a professor of Biological and Industrial engineering, along with doctoral student An Heung, have formulated a statistical model that deals with multiple time periods and multiple commodities to address supply chain design problems for lignocellulosic biomass. The model considers all components of the supply chain, from feedstock suppliers to biofuel customers.
One of the big questions for biorefinery developers is whether you should have a centralized supply chain that serves a single large plant, or several smaller conversions facilities that are closer to sources of feedstocks, says Wilhelm. &ldquo;There is a problem in moving biomass,&rdquo; he says. &ldquo;It doesn&rsquo;t have a lot of energy content, and you may invest more energy moving it that you will be able to extract.&rdquo;
The model developed by Wilhelm and his colleagues is flexible, allowing for the evaluation of various feedstocks. &ldquo;You can define a particular feedstock by identifying certain parameter values,&rdquo; he says, such as moisture content, energy content, and harvest area. According to Wilhelm, the model also addresses elements in the supply chain such as storage facilities. For example, he says, the model can evaluate the potential differences between small on-farm storage versus a larger, more regional storage solution. The model can also account for different conversion process parameters.
The research team is about to publish its third academic paper regarding the modeling system, and is hoping to continue to expand on this line of research in the future. &ldquo;We are looking for funding to continue this work, and I have several colleagues who are interested in collaborating on such a project,&rdquo; Wilhelm says, noting that the next step in the research would likely look to develop a solution methodology that would enable the model to better evaluate supply chain issues over larger geographical areas.&nbsp;
&mdash;Erin Voegele

Researchers develop a biomass supply chain model

Designing a Solution

Efficiently reducing waste while lowering greenhouse gas emissions at landfills has become epidemic, and Florida-based Eco Energy Management LLC may be at the forefront of bridging the gap between economic and ecological waste management solutions through its new Wastech system, a fully-integrated microprocessing unit that can dispose of, recycle and convert virtually any waste material into saleable byproducts such as fuel oil, biogas and carbon black char.
The key behind the Wastech&rsquo;s conversion process lies in an advanced double pyrolysis steam injection technology that processes waste material at temperatures reaching 850 degrees Celsius (1,562 degrees Fahrenheit) under normal pressures, making it easier to control explosive fuel gas that contains hydrogen discharged during the pyrolysis process, according to CEO Ed Faraone. He adds that a single Wastech unit is capable of processing up to 50 tons of waste material continuously in a 24-hour period, doesn&rsquo;t need to be shut down to cool and is much more energy efficient than traditional pyrolysis batch systems because the biogas produced in the process is used to power the machine. By incorporating self-generated biogas and steam, the feedstock is heated uniformly throughout as the steam penetrates to the center of the material. This, Faraone says, is much more efficient than the limitations of one single heat source. &ldquo;The reason we have the double pyrolysis is because of the high heat necessary to crack certain organic and inorganic materials,&rdquo; Faraone says. &ldquo;We didn&rsquo;t feel that single pyrolysis was sufficient enough to effectively crack those high degrees of temperature.&rdquo;
EEM&rsquo;s Wastech unit, according to Faraone, can handle all types of organic and inorganic waste material typically found in MSW such as plastic, rubber, medical waste, tire chips, industrial sludge, agricultural residues, coal, food waste and wood waste.
Depending on the variables such as flash point setting, needs of the customer and feedstock used, Faraone says the two-stage system can dial in the amount and quality of each byproduct a user desires. The unit, he says, is capable of producing a fuel oil similar to diesel fuel with a sulfur content of less than 1 percent, which is suitable for use in furnaces or diesel generators straight from the reactor without the need for further upgrading. The carbon black byproduct can contain less than 0.1 percent oil that meets N220 or N330 specifications, which can be pelletized and bagged for sale to the industry for a variety of uses such as for air and water filters, tire production, laser printer carbon and ink, to name a few. If left untreated in the reactor, the carbon black is classified as biochar, he adds, which can be sold as fertilizer.
Faraone says EEM provides turnkey installation of the Wastech system with a typical turnaround time of six months. A base Wastech system carries a price tag of about $5 million, but with a typical return on investment of around 20 months after start-up of production, Faraone says the system more than pays for itself.
&ldquo;Because the machine provides high-value byproducts and usable forms of energy it&rsquo;s able to gain ongoing revenue streams,&rdquo; he says, &ldquo;which plays into the rapid ROI.&rdquo;
&mdash;Bryan Sims

A Breakthrough in Waste Management

The Donald Danforth Plant Science Center has announced the addition of several new scientists, including one that will head up the center&rsquo;s Enterprise Rent-A-Car Institute for Renewable Fuels. Thomas Brutnell will join the center in January, serving as the new director for the ERAC Institute for Renewable Fuels.
&nbsp;&ldquo;I&rsquo;m really excited to be moving to the Danforth Center as it is an excellent opportunity to expand the research at the Danforth Center into new and challenging areas,&rdquo; says Brutnell. &ldquo;I am very much aligned with the mission of the center and will be striving for global food and energy security through improved crop varieties and new bioenergy grasses. We will tap technological breakthroughs in DNA sequencing technology and computational biology to drive discovery and innovation that will contribute to achieving energy security both here and abroad.&rdquo;
Additional new hires include Todd Mockler, DDPSC associate member; James Umen, ERAC Institute for Renewable Fuels associate member; Leslie Hicks, DDPSC assistant member; and Dmitri Nusinow, DDPSC assistant member.&nbsp;
&mdash;Erin Voegele

Donald Danforth Plant Science Center adds five new scientists

Rapid Expansion

Biofuels used for maritime applications are gaining ground since Maersk Line Ltd., one of the largest shipping companies in the world, partnered with WR Systems Ltd. Megan Jones, transportation maritime program manager for WR Systems, says that Maersk has worked with WR Systems in the past and after the U.S. Navy sought the help of Maersk, the shipping giant looked to WR Systems to perform the emissions testing. &ldquo;There are a lot of snake oil salesmen out there saying they have something that will reduce emissions,&rdquo; Jones says of the need for emissions testing. &ldquo;Unless you have something that can verify that reduction, it is kind of moot.&rdquo; The two companies will now put the Emsys laser-based Emissions Monitoring System to the test on the AP Moller-Maersk vessel Maersk Kalmar, which has been chosen for the U.S. Navy biofuel testing trial. Following two previous trials on U.S.-based Maersk shipping vessels that tested for system efficacy and the compatibility of the vessel under the marine approval process supervised by the American Bureau of Shipping, the U.S. Navy will use the EMS to determine and collect comprehensive emissions and particulate matter data.
The Emsys system was developed in part, Jones says, with the help of Maersk engineers, and the final testing system features a quantum cascade laser that tests emissions samples drawn from the main stacks through heated pipes that maintain the integrity of the sample during the entire testing process. The system records everything from particulate matter to sulfur oxides present in the emissions. Although Jones says she isn&rsquo;t sure what the biofuel in use for the testing is, she insists emissions testing for maritime applications is an area that will grow. &ldquo;Over the next couple of years as the marketplace goes towards abatement systems,&rdquo; she explains, &ldquo;companies will look to be monitoring what they are trying to reduce.&rdquo;&nbsp;
&mdash;Luke Geiver

Shipping giant Maersk will employ laser emissions testing system

U.S. Navy Biofuel Trials Go High-Tech

A Chicago-based feedstock developer has attracted two new strategic investors; BP Ventures and Unilever Technology Ventures. In late October, Chromatin Inc. announced the completion of a $10 billion first closing round of its Series D financing round. In addition to the two new investors, three investors who participated in earlier financing rounds also participated. Repeat investors included Quantitative Investment Holdings, the Malaysian Life Sciences Capital Fund, and Illinois Ventures.
According to Chromatin, the additional capital will help fund the company&rsquo;s programs to develop supply chains of energy crop feedstocks. Chromatin is working to develop sorghum varieties that can be used as biorefining or biopower feedstocks. The company is also developing next-generation sorghum seeds using its proprietary crop-breeding technology and biotechnology programs.
Earlier in the month, Chromatin was named as one of 10 companies to receive an award from the U.S. DOE&rsquo;s Advanced Research Projects Agency-Energy (ARPA-E) under the Plants Engineered to Replace Oil, or Petro, program. The ARPA-E award will support the company in its efforts to engineer sweet sorghum to produce high-energy molecules in the plant, providing drop-in, low-cost transportation fuel.
Information published by ARPA-E further specifies that the plants will be engineered in a way that allows them to produce up to 20 percent of their biomass as farnesene, which can be converted into renewable diesel. This substance will accumulate in the sorghum plants in much the same way sugar accumulates in sugarcane.
&ldquo;This investment signals BP's continued commitment to renewable energy feedstocks,&rdquo; says Justin Adams, head of BP Ventures. &ldquo;Chromatin is beginning to develop an exciting bioenergy business with their sorghum platform, and we are interested in understanding how we could deploy their feedstock technologies in our own activities.&rdquo;&nbsp;
&mdash;Erin Voegele

Feedstock company names new investors following ARPA-E announcement

A Sweet Deal

Brian Goodall, vice president of business development for SRS Energy, and his team have been working on algae oil separation technology since 2007, and according to him, &ldquo;If we aren&rsquo;t making money by 2014, I&rsquo;m just going to give up.&rdquo; The SRS Energy technology platform isn&rsquo;t just about algae oil separation, but it actually covers a wide scope of oil separation. The company formed after an engineer in a southeast Michigan compressor plant began researching ways to separate contaminants found in metalworking fluids. Using a modified centrifuge-based approach, that engineer quit his job at the compressor plant and formed what is known today as SRS.
Today, SRS is working on a wet-extraction technique, because Goodall says their work with supercritical CO2 or dry-hexane extraction of lipids proved to be either too costly or too energy intensive. The preferred SRS process utilizes heat and chemical conditioning of the cells followed by a physical extraction process they call the &ldquo;sledgehammer,&rdquo; which doesn&rsquo;t destroy the cells. The problem with algae cells, Goodall says, &ldquo;is that the lipids are spread throughout the algae cell&mdash;they are everywhere.&rdquo; Even if you break the cell open (via cell disruption technology), the oil still stays where it is and you can&rsquo;t get it all out, Goodall explains. And for making value-added products, you need all of the oil out.
&ldquo;The solution is to make the membrane permeable,&rdquo; he says, and that&rsquo;s achieved through a combination of chemicals, heat and pH balance. &ldquo;The secret is partial and selective hydrolysis to break open the polysaccharides.&rdquo; Although the SRS Energy team hasn&rsquo;t made their processes fully commercial yet, (they haven&rsquo;t even issued a press release Goodall says), the company appears to be on its way to success given a number of tests at the bench- and demonstration-scale. The technology can be leased today, and if a company has a specific need like fish meal or lipid extraction, Goodall says the company can tweak its systems. &ldquo;I&rsquo;m done spending money,&rdquo; he says. &ldquo;I want to make money.&rdquo;&nbsp;
&mdash;Luke Geiver

It's 2014 or bust for the algae extraction company

What SRS Energy Wants, Everybody Wants

The first-generation ethanol industry extended a helping hand to its sister industry as Colorado-based cellulosic ethanol and biochemical firm ZeaChem Inc. signed an agreement with California-based corn-ethanol producer and marketer Pacific Ethanol Inc. to provide operations, maintenance and accounting services for ZeaChem&rsquo;s 250,000-gallon-per-year demonstration-scale facility under construction in Boardman, Ore. Under terms of the agreement Pacific Ethanol Management Services Corp., a subsidiary of Pacific Ethanol, will provide operating services for ZeaChem&rsquo;s demo facility, located adjacent to Pacific Ethanol&rsquo;s existing 40 MMgy ethanol plant in Boardman, beginning in the fourth quarter.
In addition to its Boardman facility, Pacific Ethanol has two other operating ethanol plants, a 60 MMgy plant in Burley, Idaho, and a 60 MMgy plant in Stockton, Calif. &ldquo;This agreement reflects the value of our diversified business model as we extend our asset management expertise beyond the four Pacific Ethanol plants to provide plant operating and maintenance services to ZeaChem,&rdquo; says Neil Koehler, president and CEO of Pacific Ethanol. &ldquo;We are well positioned to leverage our extensive knowledge of low-carbon renewable fuel production to operate and maintain ZeaChem&rsquo;s advanced cellulosic biorefinery.&rdquo;
ZeaChem employs a hybrid biochemical and thermochemical approach that utilizes an acetogenic process to ferment C5 and C6 sugars into intermediate chemicals such as acetic acid and ethyl acetate, as well as cellulosic ethanol, from woody biomass such as hybrid poplar. According to ZeaChem, its demo plant is scheduled to begin producing test quantities of ethyl acetate and acetic acid by the end of this year using hybrid poplar as its primary feedstock. Cellulosic ethanol volumes are expected to commence in the first half of 2012. The company also recently received a USDA grant to develop biogasoline and jet fuel production from hybrid poplar.&nbsp;
&mdash;Bryan Sims

A first-gen ethanol producer helps its second-gen counterpart go commercial

March 2012

Business Briefs

Business Briefs

Business Briefs

Business Briefs

Columns

Is Double Counting a Double Whammy?

Timid Predictions and Bold Vision

Breaking Oil's Hold Over America

Ethanol's Future Won't Wait

Pondering a New Strategy

New Technologies

Get in Gear for Tax Changes in 2012

An Abundance of Opportunities

Small Government, Big Changes to Biomass Regulations

Fueling America: The Need for Standardization of Solid Biofuels

Economic Analysis of a Mobile Indirect Biomass Liquefaction System

Arranging Debt Financing for Biomass Projects

Prior Art Under the 2011 Patent Law Amendments:Traps for the Unwary

So Where Do We Go from Here?

Flying High on Advanced Biofuels!

What a Year

Featured

Thirsty for More

Training for Trains

The Fan Connection

Taking Fermentation to a New Level

Target For Transformation

Biomass Sustains Business

The Breadbasket's Biomass Belt

Four Days in the Algae Epicenter

Making a Dent in 2012 and Beyond

Hitting a New Stride

Contributions

New Pathways Could Improve Ethanol Yields

Total Cost Per Gallon: The True Measure of Success

Supercritical Water Could Provide Greener Pathway to Corn Ethanol

Researchers Evaluate Agave's Potential for Ethanol

March 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

Business Briefs

Business Briefs

Columns

Is Double Counting a Double Whammy?

Timid Predictions and Bold Vision

Breaking Oil's Hold Over America

Ethanol's Future Won't Wait

Pondering a New Strategy

New Technologies

Get in Gear for Tax Changes in 2012

An Abundance of Opportunities

Small Government, Big Changes to Biomass Regulations

Fueling America: The Need for Standardization of Solid Biofuels

Economic Analysis of a Mobile Indirect Biomass Liquefaction System

Arranging Debt Financing for Biomass Projects

Prior Art Under the 2011 Patent Law Amendments:Traps for the Unwary

So Where Do We Go from Here?

Flying High on Advanced Biofuels!

What a Year

Featured

Thirsty for More

Training for Trains

The Fan Connection

Taking Fermentation to a New Level

Target For Transformation

Biomass Sustains Business

The Breadbasket's Biomass Belt

Four Days in the Algae Epicenter

Making a Dent in 2012 and Beyond

Hitting a New Stride

Contributions

New Pathways Could Improve Ethanol Yields

Total Cost Per Gallon: The True Measure of Success

Supercritical Water Could Provide Greener Pathway to Corn Ethanol

Researchers Evaluate Agave's Potential for Ethanol

March 2012