4/29/2011 Ethanol Producer Magazine IEthanoIPr ...

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Carbon Dioxide Apps Are Key In Ethanol Project Developments

BySam Rushing I April1S,2011

About 36 standing C02 plants today are fed by ethanolbyproduct raw gas, representing about 32 percent of the totalnumber of fermentation plants serving the merchant sector ofthe C02 market. Numerous additional C02 plants are underconsideration, or slated to be built alongside future or existingethanol ventures. Despite the lag in ethanol plantconstruction in the past few years, facilities being idled and afew going bankrupt, the industry is healing itself and willcontinue to expand with advanced biofuels operationsgrowing in importance. As the role of biofuels increases in thedomestic and international energy supply, the output of C02from fermentation will also increase and with it the need todeal with it appropriately. e""

Allethanol ventures should take a fresh look at C02 as a greatopportunity, initially for future revenue streams through C02recovery and marketing. In due time, cap and trade or someother scenario for emissions reduction will take holddomestically, increasing the vatue of C02 projects in makingethanol more environmentally acceptable.Markets are key to making a commercial C02 project work, unless sequestration is the aim and assuming carboncredits, tax incentives or other government programs make these efforts economical. The existing U.S. C02-from-ethanol plants have found markets that should provide a steady stream of income for decades.

Wholesale vs. Direct Marketing

HistOrically, many of the C02 plants were owned and operated by the businesses that provided the ethanol orammonia. Since the emergence of major gas companies, most of the raw C02 has been sold to the gas refiner,who handles marketing to the merchant C02 sector. Today, however, numerous independents thrive in the U.S.selling directly to consumers. This direct C02 marketing scheme is quite common in Latin America, and manyother regions as well, supported by the large difference in margins that commonly occurs. Prices of raw gas soldto a refiner or gas company range from $5 to $25 per ton, compared to consumer market prices averaging $90 to$100 per ton; and, in some high-priced markets with little regional competition or no local supply, even $200 to$300 per ton.

C02 Uses Varied and Growing

For years in the U.S., and in developing economies now, the lion's share of C02 was dedicated to beveragecarbonation, with smaller amounts sold to welding Shops, as cylinder gas for fountain service and for fireabatement. A large number of industries simply vented the gas.

New applications In food processing have emerged for liquid C02. In individually quick-frozen productmanufacturing, the process freezes portions that do not stick together in straight-thru, multiple-pass or spiral-type cryogenic freezers. In tumble freezers, C02 liquid is injected into a blender or grinder and "flashed" underatmospheric pressure into a fine C02 "snow" used to freeze products such as pizza toppings. Sometimes theliquid C02 is vaporized for a gas flush or modified gas environment intended to preserve the food product,improve appearance and reduce bacteria count. C02 is delivered to these various freezer systems via insulatedpiping from storage vessels. Such C02 applications amount to 40 percent of the average developed economy'susage of the commodity, with some large plants using hundreds of tons daily for food processing. A plant withC02 in a region with many such food plants has a captive market.

The traditional market, soft drink carbonation, has rather straightforward requirements. Some breweries, whichdo not recover sufficient C02 via femnentation, may supplement supplies with merchant product, and some largebreweries use the gas to backpressure their systems.

In many developed economies, the food and beverage applications comprise 70 percent of all merchant productsold. In addition, there is captive use for making commodity or specialty chemicals, numerous industrial uses,enhanced oil recovery, and unique markets, such as recovering natural gas molecules from coal bed seams, whichis then replaced with C02.

In most cases, one standard grade of C02 is produced achieving a high quality product that meets the beveragestandard known as IS8T. The beverage grade will suit most applications, and far exceeds the specificationsrequired for a captive, enhanced oil recovery application. There also is a very small market for gas that meets

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4/29/2011 EthanolProducerMagazineIEthanoIPr...phannaceutical and medical usage standards for use as respiratory stimulation.

Emerging Industrial Uses

In addition to food and beverage applications, there is a large industrial sector that uses C02 in water treatmentfacilities, water softening plants and for pH buffering. The use of C02 in the form of the weak, environmentaUyfriendly carbonic acid has been a safe acid replacement material in the paper and pulp industries. It also hasapplications in treating alkaline streams such as effluent from chemical plants and food processing facilities.

Use of C02 has been popular in some metaUurgical settings, as a stirring medium for large, molten-metalprocesses, and as a coolant in foundries. Plastics manufacturing and rubberized belt manufacturers also use thegas. Using C02 to control insects in sealed grain elevators and ship holds has been popular in warm climates,replacing hazardous fumigants.C02 in the form of dry ice-which sells for many times more than a liquid product -ts popular in a wide variety ofsettings beyond the food processing industry. Dry ice has numerous uses as a portable coolant, which sublimatesas it cools. Dry ice has grown In popularity in blast-cleaning applications, where very smaU, rice-like pellets areblasted under pressure to remove paint, grease, ink or dirt, among other things, in settings from printing pressesto refineries. Solvent applications are growing in aUtypes of markets, including dry cleaning, where it eliminatesa hazardous chemical, and under pressure to extract essential oils replacing hydrocarbons.

C02 has a huge market in natural gas fracturing applications, given the right location. Another niche market isusing C02 for enhanced secondary or tertiary oil recovery. Though specific to oil-producing regions, it couldserve as a niche market for C02 for decades.

Future carbon sink and sequestration applications could include C02 use in greenhouse operations to enhanceplant growth or for raising algae to be used in next-generation biofuels. Numerous, diverse applications areunderway in test phases.These are all examples of opportunities where an ethanol project could capitalize on marketing C02 directly tothe consumer-sometimes with lucrative terms. The first step is understanding, in depth, the options.Comparing wholesale raw gas sales or direct markets requires evaluating the cost of production, distribution andoverhead. Once potential markets are identified and understood, potential risks for direct marketing can beproperty evaluated. Numerous cases exist where a niche market makes the most sense and direct marketingprovides a true opportunity to produce solid revenues.

Author: Sam RushingPresident, Advanced Cryogenics Ltd.(305) 852-2597rushing@terranova.net

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