january 2010 ethanol producer magazine

JANUARY 2010

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2010 US Ethanol Industry Salary Survey

Salary, Bonuses, Benefi t Programs, Job Satisfaction and More

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38 SALARY2010 US Ethanol Industry Salary Survey EPM presents the results of its recently conducted survey of U.S. ethanol plant personnel. Hundreds of U.S. ethanol plant employees answered questions pertaining to salary, as well as benefi ts packages, bonuses and other employment specifi cs. –By Erin Voegele

42 EMPLOYMENTWorkers Available, Ethanol Producers Wanted Ethanol industry advocates oft en tout job creation as benefi t of ethanol production. While these are envisioned as new jobs, ethanol could also play a signifi cant role in replenishing jobs lost in other industries. Bastrop, La., serves as an example of a community eager to recruit ethanol as a way to fi ll the employment void left by a recently closed pulp mill.–By Kris Bevill

46 EDUCATIONEthanol Education: A Window to Employment An increasing number of community colleges have begun to off er biofuels-specifi c training programs to fi ll the need for skilled workers who possess knowledge of ethanol-specifi c process technologies and plant operations. –By Erin Voegele

50 SUBSIDIESRewarding Greener Biofuels A long-time sustainable agriculture advocate proposes a producer tax credit tied to environmental performance as a way to encourage improved production practices.–By Susanne Retka Schill

features

contents

Corrections for our 2009 Fall U.S. and Canada Fuel Ethanol Plant Map:The EPM Fall 2009 Fuel Ethanol Plant Map incorrectly listed Green Plains Renewable Energy Inc. as the fi fth largest North American ethanol producer. GPRE has an annual nameplate production capacity of 445 MMgy and is the fourth largest producer of ethanol in North America.

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ETHANOL PRODUCER MAGAZINE January 2010

Ethanol Producer Magazine: (USPS No. 023-974) January 2010, Vol. 16, Issue 1. Ethanol Producer Magazine is published monthly. Principal Of-fi ce: 308 Second Ave. N., Suite 304, Grand Forks, ND 58203. Periodicals Postage Paid at Grand Forks, North Dakota and additional mailing offi ces. POSTMASTER: Send address changes to Ethanol Producer Magazine/Subscriptions, 308 Second Ave. N., Suite 304, Grand Forks, North Dakota 58203.

8 Advertiser Index

10 The Way I See It And the Survey Says ... By Mike Bryan

14 Business & People

18 Commodities

20 View From the Hill 2010 Ins and Outs By Bob Dinneen

21 RFA Update

22 BIObytes

24 Industry News

30 Drive What Green Jobs Waiver Means for US By Tom Buis

32 Taking Stalk Efforts to Increase Sorghum Awareness Underway By Bill Greving

34 Legal Perspective Carbon Opportunities for Ethanol Plants By Jesse McCurry

56 Events Calendar

57 Marketplace

departments

contents

7

5454 INNOVATION Distillers Dried Grains Yields High-Fiber, High-Protein Flour A South Dakota State University graduate student is developing food-grade fl our derived from distillers dried grains that could be used to provide a low-cost source of nutrition in developing countries.–By Padmanaban Krishnan and Dana Hess

contributions

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2010 International

BIOMASS Conference & Expo

2010 International

Fuel Ethanol Workshop & Expo

2010 National Ethanol Conference

Agra Industries Inc.

Biomass Magazine

Brown, Winick, Graves, Gross,

Baskerville & Schoenebaum, P.L.C.

Burns & McDonnell

Check-All Valve Mfg. Co.

CPM Roskamp Champion

EISENMANN Corp

ethanol-jobs.com

Fagen Inc.

FCStone, LLC

Fermentis

Genencor® - A Danisco Division

Growth Energy

ICM Inc.

Inbicon

Indeck Power Equipment Co.

Kennedy and Coe, LLC.

Nalco Co.

Natwick Associates Appraisal Services

Novozymes

Pioneer Hi-Bred International Inc.

Vogelbusch USA Inc.



EDITORIAL

Kris Bevill [email protected]

Craig A. Johnson Contributions [email protected]

Erin Voegele Associate [email protected]

Jan Tellmann Copy [email protected]

ART

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The Way I See It

And the Survey Says …This issue of EPM contains the most recent industry

job survey data. The participation in this survey by etha-nol producers and employees from around the country was excellent, giving us the ability to report with a high degree of accuracy on the employment statistics of the domestic ethanol industry. Estimates are that the direct and indirect jobs created by the U.S. ethanol industry are nearly 500,000.

These are domestic jobs, jobs in rural America, jobs that allow people to buy homes, boats, cars, to save for retirement, to educate their children and to improve their standard of living. The revenue generated by these jobs creates tremendous economic stimulus to Wall Street and Main Street.

The economic impact of the ethanol industry is in the billions of dollars. This is clearly not an industry that can be brushed off as insignifi cant. The importance of the domestic ethanol industry to the vibrancy of the U.S. economy, especially the rural economy, cannot be over-stated.

Recently, there have been numerous issues raised about the domestic ethanol industry. I’ll simply state that the larger the ethanol industry gets, the greater its eco-nomic impact, the more jobs it creates and the greater impact it has on the oil industry, the louder and more in-

tense and outlandish the pro-tests will become.

I invite you to read the data contained in this is-sue. Job satisfaction is high, longevity is second to none and nearly all of the employ-ees in the industry have full health insurance coverage and outstanding ancillary ben-efi t packages. These are good, high-paying jobs that help make living in a rural commu-nity worthwhile and affordable.

At a time when unemployment in the United States is in double digits, when people are losing their homes and the government is spending billions of dollars in bail-out money, the ethanol industry continues to contribute to our economic well-being. And the industry is still grow-ing. The ethanol industry has earned its rightful place in America’s domestic energy pool.

That’s the way I see it.

Mike BryanChairman

[email protected]

www.genencor.com

DISTILLASE® SSFHigh performance – consistently

© 2009 Danisco US Inc.Genencor® and DISTILLASE® are registered trademarks of Danisco US Inc. or its affiliates in the United States and/or other countries.

Open house at the new home for The New Ethanol™.

In November we opened the first Inbicon Biomass Refinery. Customers came to Kalundborg from Europe, Japan, and the United States. More international visitors stopped by during the climate summit in Copenhagen. “It doesn’t look like any ethanol plant we’ve ever seen,” they said. It doesn’t because it isn’t. Here we’re spinning 30,000 metric tons of wheat straw a year into 1.4 million gallons of The New Ethanol. Our process also produces a lignin so clean it can be

used by power generation plants without further treatment to replace coal and produce greener electric-ity. In return, the power plant supplies waste steam to cook the refinery’s straw. This energy exchange

Inbicon Biomass Refinery. Making ethanol work for the world.™

creates a dramatic boost in the efficiency of both plants. The Danish modern design also houses the new Inbicon Biomass Technology Campus. It’s home to R&D as well as our client and partner center. Here we’ll foster worldwide collaboration with scientists, owners, financiers, and construc-tion executives on everything from quality control to revenue enhancement to staff training. Join us in the knowledge exchange that keeps us continuously improving our process. By spring, we’ll have the plant in full operation, continuing to optimize it. So if you didn’t come for the opening, come for the open house we’ll arrange just for you. Call Thomas Corle at 01.717.626.0557 or e-mail [email protected].

© 2009 Inbicon, Kraftværksvej 53-Skærbæk, 7000 Fredericia, Tel +45 76 22 20 00 The New Ethanol™ and Inbicon Biomass Refinery™ are trademarks of Inbicon A/S and DONG Energy A/S. www.inbicon.com

14 ETHANOL PRODUCER MAGAZINE • January 2010

Independent biofuels supply chain management fi rm Aska Energy, has launched a rail optimization clearinghouse geared toward the ethanol in-dustry. Ethanol producers can participate in “swaps” facili-tated by the company as a way to reduce shipping costs and turn-around times. According to company president Dan Gor-don, swap participants save up to 10 percent of their original freight costs.

Gordon said optimization swaps are standard operating procedure in the petroleum in-dustry, but not yet commonly used in the ethanol industry.

Jonathan Silver has been named executive director of the U.S. DOE’s loan program of-fice and will oversee the loan guarantee program and the ad-vanced technology vehicles man-ufacturing loan program as well as manage the all of the depart-ment’s alternative energy invest-ments.

Prior to his appointment to the DOE, Silver was a venture capitalist and managing general partner of Core Capital Partners, an early-stage investor in alterna-tive energy, advanced manufactur-ing, telecommunications and soft-ware. He also previously served as a policy advisor to the Secretaries of Commerce, Interior and Trea-sury in the 1990s and was a mem-ber of the team that negotiated the fi rst clean car agreement with the nation’s auto manufacturers.

Vancouver, British Co-lumbia-based cellulosic ethanol developer Syntec Biofuel Inc. has retained Investor Awareness Inc. as its investor relations fi rm. The Chicago-based fi rm special-izes in accelerating growth in the value of small to mid-size com-panies and will be responsible for creating outreach programs to increase Syntec’s visibility in the investment community and spread awareness about its re-cent developments.

According to the company, Syntec has developed a ther-mochemical process to gasify various feedstocks and produce ethanol as well as biomethanol, propanol and butanol.

Salco Products Inc., a supplier and manufacturer of products for the freight trans-portation industries, has received testing results of its improved chevron-style manway tank car nozzle gasket. The gasket, which was developed to enhance sealing on tank cars with hinged man-ways, was found to have greater overall compression and greater sealing uniformity between the chevrons and around the nozzle compared to a fl at gasket. The company said the gasket’s design helps eliminate non-accident re-leases at the manway and also al-lows for better compliance with

non-uniform cover and nozzle forces that arise from the bolt-ing pattern.

Green Plains Renew-able Energy Inc. has appointed Michelle Mapes as executive vice president - general counsel and corporate secretary. She will be responsible for all legal and regulatory affairs for the company and will report directly to Todd Becker, GPRE’s president and CEO. Prior to joining GPRE in September as its general counsel, Mapes was a partner at Husch Blackwell Sanders LLP, where she focused her practice in renewable en-ergy.

In addition, Wayne Hoove-stol has resigned from his posi-tion as chief strategy offi cer of the company, but will retain his seat as chairman of the board. “I feel fortunate to have helped the company get to this point and I leave knowing the company is in good hands,” he said.

CHS Inc., has ap-pointed Josh Blaisdell as vice president of its new corporate compliance de-partment. Blais-dell joined CHS in 1990 and has

served as the company’s tax director since 1995. In his new role with CHS, he will lead the company’s overall domestic and international compliance and audit programs, and will be responsible for corporate compliance and results, in-cluding government rules and

regulations and develop-ment of company policies and procedures. Blaisdell will also be in charge of the implementation and maintenance of compli-ance programs, policies and procedures. He will report to David Kastelic,

senior vice president of the legal and compliance depart-ment.

Well-known corn grower and ethanol industry member Gary Pestorious has joined the board of directors of Growth Energy. His is replacing Dar-rin Ihnen, who left the board to assume the role of president of the National Corn Growers As-sociation.

Pestorious is a charter member of the Minnesota Corn Growers Association and has served as chairman of Poet Biorefi ning - Glenville in Albert

Lea, Minn., for 10 years. He also serves on the boards of Poet Biorefi ning - Han-lontown in Iowa and Poet Biorefi ning - Lake Crystal in Minnesota and is chair of the SoyMor Biodiesel LLC plant in Minnesota.

&Business PeopleEthanol Industry Briefs

Mapes

Blaisdell

ETHANOL PRODUCER MAGAZINE • January 2010 15

Sponsored by

Enerkem co-founder and chief technology offi cer Esteban Chornet received a Synergy Award for Innovation during the 2009 Natural Sci-ences and Engineering Research Council of Canada Synergy and Innovation Challenge Awards presentation, held Oct. 19 in Ottawa, Ontario. The award honors outstanding university-industry research and develop-ment partnerships in natural sciences and engineering. As part of the award, Chornet re-ceived a $200,000 research grant on behalf of the University of Sherbrooke, Enerkem, Fractal Systems and CRB Innovations.

Enerkem, a waste-to-biofu-els producer, is currently operat-ing two facilities in Canada and has a facility in the development stage in Mississippi.

Poet LLC has developed an ethanol byproduct capable of replacing petroleum-based ingredients in various house-hold products. According to the company, Inviz can be used as a gum base or in fi lms, packaging, adhesives, coatings and glazes. It is Poet’s own brand of zein, derived from the less-valuable protein in distiller’s grains, and is extracted using a patent-pend-ing process developed by Poet.

Because Poet’s production pro-cess fractionates the corn kernel and ferments ethanol without requiring the use of heat, the company said its zein product is more pure corn protein than other similar products.

Ron Miller has resigned as president and CEO of Aven-tine Renewable Energy Hold-ings Inc. and is being replaced in the interim by George Hen-ning, who will also retain his position as the company’s chief fi nancial offi cer.

“Ron has been with Aven-tine since its formation and was a central part of Aventine’s birth and growth,” said com-pany Chairman, Bobby Latham. “Ron’s leadership will be missed, but the company understands and respects his decision to make a fresh start, just as the company prepares for its fresh start through the bankruptcy process.”

Bioenergy Engineer-ing 2009 recently honored four individuals and one bioenergy corporation at its international conference held in Bellevue, Wash. John Ferrell received the federal agency bioenergy pioneer award; Phillip C. Bad-ger was given the private enter-

prise bioenergy pioneer Award; Ralph P. Cavalieri was hon-ored with the public service bioenergy pioneer award; and Bryan M. Jenkins received the academic bioenergy pioneer award. The bioenergy company of the year award was given to Abengoa Bioenergy Group in recognition of its commitment to produce biofuels in a manner that is energy and environmen-tally sustainable.

Ethanol production has resumed at the 110 Mmgy for-mer VeraSun plant in Hankin-son, N.D. Murphy Oil Corp. purchased the facility for $92 million in early October and re-sumed operations immediately. Murphy Oil plans to use the ethanol produced at Hankin-son Renewable Energy LLC to supply its own petroleum blending operations and said it chose to purchase the facility due to its proximity to feedstock and rail service.

Cargill Inc. has ac-quired the rights to the land and grain handling assets of the former Altra Nebraska LLC ethanol facility in Carleton, Neb. Construction on the Altra facility began in 2006 and was approximately half complete in November 2007, when con-

struction was halted after plant owners were unable to secure additional fi nancing. Cargill took possession of the facility Nov. 4.

Otter Tail Ag Enter-prises LLC fi led for Chapter 11 bankruptcy protection in U.S. Federal Court on Oct. 30. The bankruptcy was prear-ranged with Otter Tail’s lenders and will allow it to avoid liquida-tion of the facility. Otter Tail is required to raise $10 million to $12 million as part of the agree-ment. The company did make an effort to avoid bankruptcy, but was unsuccessful at nego-tiating terms on $81 million in long-term debt from the plant’s construction.

Faegre & Benson LLP recently announced the forma-tion of a New Energy, Clean Technology and Climate team. The team aims to anticipate and mitigate the legal risks associated with a rapidly changing regula-tory environment and the “new energy economy.” More than 50 attorneys from the lawfi rm’s of-fi ces in Boulder, Colo.; Denver; Des Moines, Iowa; Minneapolis; Shanghai; and London will col-laborate to provide services in the new energy, clean technol-ogy and climate sectors.


Cleveland-based Aris-dyne Systems Inc., a biofuels technology and equipment com-pany, recently received verifi ca-tion of the effectiveness of its ethanol production process im-provements from the National Corn to Ethanol Research Center in Edwardsville, Ill. The company’s cavitation systems al-low corn to be processed into fi ner particles than traditional milling methods used in ethanol production. This increased effi -ciency improves yield and allows producers to improve fi nancial performance.

The Baumer Group, an international manufacturer of sensors and system solutions for factory and process automa-tion, has introduced the FODK 23 optical sensor for leak moni-toring. The sensor is designed to be installed onto a dry fl oor or base panel in the area where leakage might occur. The evalu-ation electronics for this sensor are housed in a chemically-resis-

tant, IP67-rated sheath made of Tefl on PFA, which allows the device to withstand exposure to a range of liquids. The sensor is designed to react to as little as 1 ml of leaked liquid.

MGP Ingredients Inc. has appointed Don Tracy to the position of vice president of fi nance and chief fi nancial offi -cer. Tracy’s experience includes serving as senior vice president of the process improvement group of National City Corp. in Cleveland, from 1999 to 2001; senior manager of the strategic services unit at A.T. Kearney Inc. in 1998; senior manager of performance improvement management consulting for Ernst & Young Consulting; and various positions with Procter & Gamble Co.

Bob Petruzzi has joined Intersystems, a divi-sion of ESI, as sales manager for the company’s southeastern U.S. territory. Petruzzi will be responsible for marketing the company’s line of bulk mate-rial handling equipment to the feed, grain, pet food, ethanol and other related industries in the southeast. Petruzzi brings 30 years of ex-perience in the animal feed, grain and pet food in-dustries. He has served in various management and sales positions

for companies such as Gold Kist Inc., ConAgra Foods Inc., and Anitox Corp.

Genencor, a division of Danisco, received the na-tional sustainable energy award from the American Institute of Chemical Engineers (AIChE) for its accellerase family of en-zymes for cellulosic ethanol. The AIChE awards committee presented the award to Landon Steele, marketing director for biomass enzymes and accel-lerase product manager, and Aaron Kelley, senior engineer of biomass applications and the accellerase 1500 project leader. The AIChE sustainable energy award recognizes the critical im-pact of chemistry and biochem-istry innovations in developing sustainable energy solutions.

Blackmer, a manu-facturer of positive displace-ment pumps and compressor technologies and an operating company within Dover Corp.’s pump solutions group, recently

announced that its BV2 Bypass Valves are now available with high-grade FKM O-rings. O-Rings made of FKM (vinylidene fl uoride) provide addition-al heat and chemical resis-tance, allowing the valves

to be used in a wider range of process applications, including use with biofuels.

Irvine, Calif.-based Blue-Fire Ethanol Fuels Inc. has announced the relocation of its second planned biorefi nery to Fulton, Miss. Although the fa-cility was originally planned for California, delays in the licens-ing and permitting process and a challenging business climate within the state convinced Blue-Fire to petition the U.S. DOE for a site change. The company was awarded a $40 million DOE grant in 2007 to support the de-velopment of its second facility.

New Jersey-based ChemPro Group LLC has formed an alliance with Mis-souri-based Mo-Fuel (Rural Bio-waste), the Energy Di-vision of Menaje Negocios Corp., to commercialize a pat-ented feedstock-fl exible cellu-losic ethanol process. Mo-Fuel (Rural Bio-waste)’s technology is a continuous catalytic hydro-lysis process that lends itself to modular construction, and ChemPro has experience in de-signing and building modular

&Business PeopleEthanol Industry Briefs

Petruzzi


ethanol production plants. The next step for the companies will be to build a mobile feedstock testing unit that is expected to be operational by early 2010.

California-based indus-trial biocatalyst developer Co-dexis Inc. has named Robert Lawson as senior vice president and chief fi nancial offi cer. In his new position, Lawson will be responsible for the company’s fi nancial, accounting and infor-mation technology operations. Prior to joining Codexis, Law-son was employed by Intuit, where he held a series of senior fi nancial management positions, most recently serving as vice president of the fi nance-con-sumer group.

GreenHouse, distribu-tor of the E-Fuel MicroFueler, has partnered with Allard Re-search and Development, a company that designs and builds custom ethanol produc-tion systems. GreenHouse now holds the exclusive license to distribute Allard’s technologies and provide ethanol production services to soft drink compa-nies and government agencies. According to GreenHouse, the partnership will allow the com-

pany to develop and distribute new technologies for ethanol production, automation and hy-droponics.

INEOS Bio has select-ed KBR Inc. to serve as its en-gineering contractor to develop the front-end engineering and design for its fi rst advanced bio-energy plant. INEOS Bio’s tech-nology focuses on converting low-cost carbon materials, in-cluding waste, into ethanol and renewable energy. According to INEOS Bio, work on the bioen-ergy facility’s commercial design began during the second half of 2008. Front-end engineering and design work is scheduled to be complete in early 2010, with commercial production expect-ed to commence in 2011.

Tenaska Biofuels LLC and Tri-State Financial LLC have entered into a two-year tolling agreement that will allow ethanol production to resume at Tri-State’s Rosholt, S.D.-based North Country Ethanol plant. The 26 MMgy facil-ity originally began opera-tions in 2005. In October 2008 the facility was idled as the original ownership entered bankruptcy pro-ceedings.

Under the tolling agree-ment, Tenaska Biofuels will purchase corn and natural gas, which Tri-State will use to produce ethanol and distillers grains. Tenaska Biofuels will own all materials processed at the facility and will market the plant’s ethanol and distillers grains products. The facility was scheduled to resume operations in mid-November.

Michiel van Lookeren Campagne has been named president of Syngenta Bio-technology Inc. In his new position, van Lookeren Cam-pagne will lead the company’s global biotechnology research and development efforts at both of the company’s biotech facil-ities—Syngenta Biotechnology, the company’ s North American biotechnology headquarters in South Carolina-based Research Triangle Park, and Beijing-based Syngenta Biotechnology China Co. Ltd.

Nicholas C. Conrad has accepted the position of vice president of fi nance and treasurer at The Andersons Inc. The position was recently vacated

by Gary Smith, who retired after 29 years with the company. Con-rad has been employed by The Andersons since 1984, most recently serving as the assistant treasurer.

The Andersons also re-cently named John T. Stout Jr. to the company’s board of directors. Stout currently serves as the CEO of Plaza Belmont Management Group LLC and has served on the economic advisory council of the District Ten Federal Reserve Bank for the past six years.

Cambridge, Mass-based Verenium Corp. has entered into an agreement with Value Prior to Pulping to evaluate the effectiveness of its C5 cellulosic ethanol production technol-ogy on hemicellulose feedstock generated by the pulp and paper process. VVP is an organization that was created by the Agen-da 2020 Technology Alliance, which is a special project of the American Forest and Paper As-sociation and CleanTech Part-ners Inc. EP

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SHARE YOUR INDUSTRY BRIEFS To be included in Business & People, send information (including photos and logos if available) to: Industry Briefs, Ethanol Pro-ducer Magazine, 4650 38th Ave. S. Suite 160, Fargo, ND 58104. You may also fax information to (701) 373-0638, or e-mail it to [email protected]. Please in-clude your name and telephone number in all correspondence.

Conrad


COMMODITIES REPORT

Natural Gas Report

Corn Report

By Brad Smith, U.S. Energy Services Inc.

By Jason Sagebiel, FCStone

Nov. 17—Natural gas prices collapsed along with the economy in 2008-‘09. While industrial demand decline is typically the most cyclical factor, the collapse also impacted the residential and com-mercial sectors. Power generation, which has been the main source of growth for natural gas demand in the past decade, also suffered a decline in 2009. However, gas demand for power still grew in 2009 because many power generators have been able to displace coal with gas on a regional basis.

Coal displacement and exchange traded funds’ (ETFs) buying have been the main sources of price support in the second half of 2009. However, as prices have rebounded from September lows, coal displacement demand is in signifi cant decline. Heading into winter, the amount of gas in storage is at all-time records and creating system pressures and congestion on the pipes. With the price decline, pro-ducers have cut the rig count by 54 percent from Sept. 2008 highs.

Sustained economic growth in early 2010 will be hampered by an end to the inventory restocking cycle, unemployment and con-

sumer spending. On the supply side, with the year-over-year drop in rig counts, the market is forecasting conventional supply loss that may exceed the gains in unconventional drilling. Based on inconsis-tent, weather adjusted weekly storage injections, overall supply levels appeared to decrease in October and November. The market is di-vided on whether this tightening supply trend will result in an un-dersupply in mid- to late-2010, requiring higher prices to incentivize increased conventional drilling.

Increased shale accessibility and producers who are unwilling to curtail production voluntarily have led to a sticky supply situation. The increasing rig count, higher productivity provided by unconven-tional drilling, temporary shut-in production returning, yet to be tied-in wells, high storage levels and a reversal of coal-to-gas displacement will all work to limit upside to current 2010 prices. Key factors to watch will be economic recovery and production data. EP

Brad Smith, price risk manager, can be contacted at [email protected].

Nov. 23—This season, the corn market experienced the slow-est harvest season of the past 25 years. Wet conditions kept farmers out of the fi elds, thus delaying corn harvest. By comparison, one of the most recent slow corn harvests was in 1992. That year, only 59 percent of the corn was harvested by the second week of No-vember. This year, only 54 percent had been harvested by that time. One thing to note is that, despite 1992 being one of the slowest harvests on record, it was also a new record yield harvest. In 2009, a slow harvest also resulted in a new record yield.

Wet weather has led to some concerns about corn quality and the effects that will have in the demand pipeline, especially for etha-nol. The USDA left corn demand for ethanol and feed unchanged in its November report. The export estimate was reduced by 50 million bushels despite a weakening U.S. dollar. World corn carry-out this year is projected to decrease from the previous estimate by 3.84 million metric tons to 132.41 million metric tons. One year ago, the USDA estimated world carry-out at 145.95 and 129.72 in the ‘07/’08 marketing year.

The accompanying graph illustrates the new record yield (as of Nov. 23). Prices into the spring will be met with great appreciation

from the speculative/infl ation community. Being long on a com-modity of any sort continues to spark interest, thus making funda-mental trading even more diffi cult. Managing the entire margin will be crucial for ethanol profi tability going forward. EP

Current oversupply won’t last

Delayed harvest keeps people guessing


COMMODITIES REPORT

DDGS Report

Ethanol Report

By Sean Broderick, CHS Inc.

By Rick Kment, DTN Biofuels Analyst

Toxin concerns replace shipping issues

Strong ethanol demand continues

Nov. 24—The DDGS market has recently experienced a round of good news/bad news scenarios. The good news is it appears the DDGS/hazardous materials shipping situation has been partially resolved. Although the International Maritime Organi-zation classifi cation of DDGS as a hazardous material remains, shippers and insurers have found ways to ad-dress this issue, which should open up opportunities in the Gulf of Mexico as winter progresses. It would have been nice to if this had been resolved before the impending closure of the northern Mississippi, but it is still wel-come news.

The bad news is the discovery of mycotoxins in corn. Although early reports were blown way out of pro-portion, elevated levels of vomitoxin have been found in DDGS. Howev-

er, most plants were testing inbound corn and were in front of the situa-tion. Hopefully none of the elevated levels found their way into the export market because toxin levels are already at the top of every importer’s list of concerns.

Domestically, demand has been very steady. Still a lot of hand-to-mouth buying, but the optimism of ethanol plants and livestock producers has led to increased forward trading, even if it is just for the fi rst quarter of 2010. There is still strong demand in the container market, mostly from China.

Going ahead, supplies of distillers grains will increase as plants operate at maximum capacity. Exports will need to keep pace, but concerns of available containers after December shipments will keep exporters on edge. EP

Nov. 23—Overall commodity prices have experienced market volatil-ity, before rebounding in mid-Novem-ber after new investment funds entered the market. The U.S. dollar continued to struggle as concerns of stable inter-est rates, along with strength in over-seas markets, kept investors away from fi nancial investments. At the same time, the Dow Jones posted a 13-month high in the third week of November, and the support in the stock market drove gold to an all-time new high.

All this points to additional invest-ments stepping into the energy and gasoline markets at a time when tradi-tionally the market is moving signifi -cantly lower. Moving into December, crude oil was hovering near the $80 per

barrel level, although it was unable to break that barrier. Downstream, gaso-line in the futures market was stuck around the $2 per gallon level. The end of the year could be very interesting in the energy markets, as most of this movement will be more associated with the investment value of commodities moving into 2010.

Ethanol demand continues to in-crease with the surge in overall usage and a renewed uptick in corn prices. In late November, the fundamentals of the grain market had not changed from previous months and overall harvest pressure remained. Strong investments in commodities have helped to elevate ethanol markets above $2 per gallon. EP

Regional Ethanol Prices ($/gallon as of Nov. 23)

Regional Gasoline Prices ($/gallon as of Nov. 23)

DDGS Prices ($/ton)

Corn Futures Prices (Dec. corn, $/bushel)

Natural Gas Prices ($/MMBtu)

U.S. Ethanol Production Output (barrels/day)

Cash Sorghum Prices ($/bushel)

REGION

West Coast

Midwest

East Coast

REGION

West Coast

Midwest

East Coast

LOCATIONMinnesota

California*

Chicago

Buffalo, N.Y.

Central Florida*Central Valley

DATENov. 20, 2009

Oct. 20, 2009

Nov. 20, 2008

NYMEX

N. Ventura

Calif. Border

August 2009

July 2009

August 2008

Superior, Neb.Beatrice, Neb.Sublette, Kan.Salina, Kan.Triangle, TexasGulf, Texas

SPOT

2.258

2.19

2.29

SPOT

1.9906

1.9092

1.9814

NOV. 2009110

170

136

145

153

HIGH3.99

3.89 1/2

3.69 3/4

NOV. 20094.289

4.81

4.62

727,000

728,000

647,000

NOV. 19, 20093.443.383.173.473.503.93

RACK

2.22

2.25

2.44

RACK

2.0725

2.0590

2.0603

OCT. 2009110

165

130

150

155

LOW3.90 1/4

3.79 1/4

3.61

OCT. 20093.73

3.85

3.80

OCT. 22, 20093.493.443.243.563.464.36

NOV. 2008125

165

105

120

145

CLOSE3.91

3.84 1/2

3.63 3/4

NOV. 20086.469

6.08

3.91

NOV. 14, 20082.952.802.973.102.973.88

SOURCE: DTN

SOURCE: DTN

SOURCE: CHS Inc.

SOURCE: FCStone

SOURCE: Sorghum Synergies

SOURCE: U.S. Energy Services Inc.

SOURCE: U.S. Energy Information Administration


VIEW FROM THE HILL

2010 Ins and OutsThe start of each New Year provides an opportunity to look back at the year that was and speculate on the year

that will be. The past few years, I have used this column as an opportunity to take a well-meaning, tongue-in-cheek look at the industry. I have tried to analyze the trends going on in the industry and also provide what I hope is a little bit of entertainment.

So, if you will indulge and read this with the spirit in which it was intended, I proudly present the 2010 In and Out List:

OUT IN Food versus fuel 162.9 bushels of corn per acre Stimulus package Jobs bill Black liquor loophole VEETC extension Net energy balance International indirect land use change E85 stand-alone pumps Blender pumps NEVC RFA market development team Blended fuels Drop-in fuels Corn stalks Algae Chairman John Dingell Chairman Henry Waxman Secretary Bodman Secretary Chu DOE loan guarantees USDA loan guarantees Methane digesters Gasifi ers Al Gore’s “Our Choice” Consumer choice 10.5-billion-gallon ethanol mandate 12-billion-gallon ethanol mandate Renewable fuel standard waivers Cellulose credits Liquidation Consolidation Airshed modeling Life-cycle analysis UNICA Global Renewable Fuels Alliance Ethanol imports Ethanol exports $8 per bushel corn $4 per bushel corn Ethanol use mandates Low carbon fuel standards Social sciences Social media [email protected] @EthanolBob EPIC BYOEthanol Indy 500 NASCAR RFA Daily Clips RFA Smartbrief

Bob DinneenPresident and CEO

Renewable Fuels Association


RFA UPDATEwww.ethanolRFA.org

RFA launches GPS application for E85 locations The Renewable Fuels Association launched a new

GPS application for Garmin users that maps out the lo-cation of E85 stations all across the country. Using the Garmin navigation system, fl ex-fuel vehicle (FFV) owners can download station locations and program their device to guide them to upcoming E85 stations. To download this Garmin application, visit www.chooseethanol.com for step-by-step instructions. There, consumers can download indi-vidual state data, a combination of states, or national data directly to their computer and then to their Garmin devices. Directions for installing this point of interest data are now available.

EPA encouraged to approve E12 as interim ethanol blend

In anticipation of a delayed E15 rule from the U.S. EPA, the Renewable Fuels Association issued a pathway to E12, illustrating how the EPA can authorize the use of E12 under existing regulations.

Based on authority provided under the Clean Air Act and on previous fuel approvals, the EPA could deem E12 to be “substantially similar” to E10 and other fuels already approved for use. The issue centers on the oxygen content of the fuel and variances currently recognized by the EPA. Starting with the “gasohol” waiver in 1978 and building upon regulations through the years, the EPA has already allowed for fuels with oxygen contents equivalent to E12 blends.

A complete and detailed outline of the evidence sup-porting this pathway can found in the RFA’s comments to EPA on the E15 waiver request, available on the RFA’s website at: http://renewablefuelsassociation.cmail1.com/T/ViewEmail/y/01431982E94079C2.

Dinneen addresses World Ethanol membersRFA president and CEO Bob Dinneen spoke at the

World Ethanol 2009 conference in Paris on Nov. 2 and ad-dressed the need for ethanol on a global level. “We need to fi nd new ways to work together, to grow this industry, to develop new technologies, to make and market new products, to answer the attacks upon us and to push for public policies that recognize the worldwide need for clean-burning biofuels that can power our planet towards a more sustainable energy future,” he said. “Let’s face it: renew-able fuels have only taken hold in countries such as the U.S. and Brazil that have created and sustained programs to encourage their production.

As we continue to grow this industry, it is important that countries be allowed to create their own programs and de-velop their own biofuels industries, using whatever indig-enous raw materials are available to them, without having to subsidize the biofuels production of others.”


The portion of the U.S. EPA’s proposed rule for the RFS2 would require ethanol producers to track and verify the origins of their feedstock, a nearly impossible task, according to members of the ethanol industry.

Clemson University Res-toration Institute and South Carolina-based ArborGen LLC, a commercial tree pro-ducer, have partnered to de-velop woody biomass as dedi-cated biofuels feedstock. The partners will identify areas of joint research, including plant genetics and development, fi eld trials, equipment engi-neering, material handling and woody biomass pretreatment.

“This relationship marks a big move for the collabora-tive into trees as a feedstock,” said Clemson University Re-

search Institute corporate op-erations director Karl Kelly. “ArborGen is a key industry leader that can develop our ex-isting switchgrass-to-ethanol program into other forms of biomass.”

In addition Clemson will bring ArborGen into the Bio-energy Collaborative, which is a public-private partnership developed to investigate com-mercial ethanol production in South Carolina. Other mem-bers of the collaborative in-clude, Fagen Engineering LLC and Dyadic International Inc.

South Carolina focuses on trees

Alfa Laval recently an-nounced it has received a second SEK 100 million ($15 million) order from the PetroVietnam Group for equipment and en-gineering solutions that will be installed in an ethanol plant. The second order will support the development of a cassava-based ethanol facility in northern Viet-nam. The fi rst order, which was announced in mid-October, will support the development of a similar facility in central Vietnam. Both orders are scheduled to be delivered in 2010. Heat exchang-

ers supplied by Alfa Laval will be used in the plants’ starch-based fermentation, distillation and de-hydration processes.

The PetroVietnam ethanol facilities are part of Vietnam’s biofuel development program, which was ratifi ed by the na-tion’s government in 2008. The program aims to partially replace traditional fuels with renewable energy sources, and includes a goal to produce 86 million gal-lons of renewable fuel, including ethanol, by 2015.

Poet LLC hosted a fi eld at its 25 MMgy pilot-scale plant in Scotland, S.D. in November to showcase equipment that can be used to harvest cellulosic feedstocks such as corn cobs. Agco Corp., a manufacturer and distributor of agriculture equip-ment, including biomass bailers, was one of the companies to display equipment. “Biomass is

a major area of interest,” said Agco spokesman Reid Hamre. “We were very proud to partici-pate for the fi rst time in Poet’s fi eld day.”

Offi cials from the USDA and U.S. DOE were also on hand to speak with area farmers about the fi nancial assistance available to procure equipment and pay for feedstocks.

Alfa Laval to supply Vietnam plants

Equipment manufacturersshowcase cob harvesters

BIObytes Ethanol News Briefs

The U.S. DOE is develop-ing a National Algal Biofuels Technology Roadmap to assess the current state of algae tech-nology and determine how to commercialize algae-to-biofuel processes. The agency intends to focus on developing ad-vanced drop-in biofuels, such as those that are being devel-oped from algae, in a more ac-celerated fashion than cellulosic ethanol.

According to Valerie Reed of the DOE’s Offi ce of En-ergy Effeciency and Renewable

Energy, the DOE is seeking to develop algae-to-biofuels pilot-scale demonstration facilities within 10 years. The agency has already dedicated $50 mil-lion toward this development and hopes to learn from some of the mistakes made in devel-oping cellulosic ethanol. “Cel-lulosic ethanol was done in a piecemeal fashion, and this consortia concept is meant to bring together all the experts necessary, with some key tar-gets in mind,” she said.

DOE places emphasis on algae development

The U.S. DOE is expected to release a roadmap to algal biofuels technology by January which will provide an assessment of current algae technology and determine how to commercialize the algae-to-biofuel process.


The Shiloh, Ill.-based Green Mount Motomart be-came the 200th Illinois fueling station to offer E85 on Oct. 23. As part of the festivities, each fl ex fuel vehicle (FFV) owner who fi lled their car with E85 on that day received a $10 coupon to be applied to their fuel purchase.

Illinois Gov. Pat Quinn spoke at the event. “It’s vitally important that we continue to bring E85 stations to all parts

of Illinois,” he said. “E85 saves money when you fi ll up your tank, supports Illinois ag-riculture and jobs, and keeps our air clean.”

The event was sponsored by Motomart, the Mon-Clair County Corn Growers Asso-ciation, the Illinois Corn Mar-keting Board, the American Lung Association in Illinois, and the Illinois Renewable Fu-els Association.

200th E85 location opens in Illinois Illinois Gov. Pat Quinn fuels up with E85.

A new national economic impact study performed at the University of California-Berkeley found that passage of a compre-hensive national climate policy will create jobs, increase personal income and boost the nation’s gross domestic product, without increasing energy costs to the consumer.

The study was an orga-nized collaboration across three universities, said David Roland-Holst, lead author of the study and economics professor at UC-Berkeley. To complete the study, researchers created a state-of-the-art forecasting model that

provides national- and state-level detail of the economic effects of national climate policy.

According to Holst, there are three pillars of national cli-mate policy that must be deliv-ered in unison to order to realize these benefi ts: reducing carbon emissions, improving energy effi -ciency and promoting renewable energy alternatives.

Holst said Michigan specifi -cally stands to gain from such a policy, as the state could benefi t approximately 40,000 additional jobs and increase personal in-come by $600 to $1,000 per per-son by 2020.

The United Nations has released an overview of recent major research reviews of fi rst-generation biofuels from experts around the world. The UN report highlights a wide variety of issues related to global biofuels produc-tion, including current trends, environmental impacts and the potential impacts of increased demand and land use change.

The report stated that net greenhouse gas (GHG) savings resulting from emissions associ-

ated with biofuels production vary depending on feedstock used, conversion technology and methodological assumptions. Sugarcane was found to have the highest GHG savings, ranging from 70 percent to more than 100 percent when compared to emissions from fossil fuels. Com-paratively, emissions from corn ethanol were found to have a sav-ings of 60 percent to a 5 percent increase in emissions over fossil fuels.

The U.S. Department of Energy recently awarded $21 mil-lion in funding to develop supply systems to handle and deliver feedstocks for cellulosic biofuels production.

Columbus, Ohio-based FDC Enterprises Inc. was one of fi ve winners to share in the

$21 million grant. FDC Enter-prises plans to complete design, fabrication and demonstration of three types of innovative harvest and biomass handling machines, including a single-pass mowing and baling opera-tion, a bale picking truck, and a self-loading trailer.

DOE funds development of feedstock supply system

Study: climate policy will create jobs

UN review favors sugarcane over corn

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GreenShift Corp. recently announced that the U.S. Patent and Trademark Offi ce has issued two patents to its wholly owned subsidiary, GS CleanTech Corp., for ad-vanced processing methods for corn oil ex-traction. GreenShift estimates the ethanol industry currently produces more than 20 million barrels of corn oil per year. The oil can be used as a feedstock for biodiesel and renewable diesel, among other applications.

The ‘858 patent, Method of Processing Ethanol Byproducts and Related Subsys-tems, awarded Oct. 14, is for GreenShift’s proprietary approach to the extraction of corn oil. The ‘729 patent, Method of Free-ing the Bound Oil Present in Whole Stillage and Thin Stillage, announced Oct. 27, details GreenShift’s process for extracting the corn oil before the grains are dried.

David Winsness, GreenShift’s chief technology offi cer and co-inventor of the company’s extraction technologies, describes the process as unique in the industry. “There are no other technologies that have been

developed for corn ethanol producers that begin to approach even a fraction of these results in the entire history of the ethanol in-dustry,” he said. “The ‘858 patent covers the core of our extraction platform. The ‘729 patent builds off the ‘858 patent to enhance yield and optimize energy utilization.”

Ethanol plants capturing corn oil can realize an added benefi t from selling the oil. In addition, an effi ciency improvement is created by removing the oil, which acts as an insulator during the drying process. Green-Shift estimates an ethanol plant’s savings at roughly 13 cents per gallon of ethanol.

According to GreenShift, the compa-ny’s patented and patent-pending extraction technologies can increase biofuel yields per bushel of corn by 7 percent, while reducing the energy consumption and greenhouse gas intensity of corn ethanol production by an estimated 21 percent and 29 percent, respec-tively.

Immediately after it received the pat-ents, GS CleanTech fi led legal action in the

U.S. District Court (Southern District of New York) against GEA Westfalia Separator Inc. and others in the industry for infringing on GreenShift’s U.S. patent covering corn oil extraction technology.

“The economic and environmental ben-efi ts to the ethanol industry made possible by our portfolio of patented and patent-pend-ing extraction technologies are remarkable,” said Kevin Kreisler, GreenShift’s chairman and CEO. GreenShift contends that seven years after it started offering its corn oil ex-traction equipment to the ethanol industry and well after its patent applications were published, Westfalia trivialized those innova-tions as it solicited and infl uenced customers in the ethanol industry to use Greenshift’s now-patented technology. GreenShift’s team demonstrated the feasibility of its corn oil extraction technology for the fi rst time in 2004, according to the company.

—Craig A. Johnson

GreenShift awarded patents, fi les lawsuit

Chemist Kevin Hicks checks the color and quality of a corn fi ber oil sample.

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Finding natural solutions to diffi cult chemical conundrums is the purpose of the Great Lakes Bioenergy Research Cen-ter in Madison, Wis. Researchers there are looking to leafcutter ants for new enzy-matic processes that will further efforts to commercialize cellulosic ethanol. The ants, which are found in tropical climates and live in enormous colonies with popula-tions that can number in the millions, have evolved several features over time that make their particular cocktail of enzymes attractive to researchers.

Leafcutters are considered a pest for most agricultural operations in Central and South America. “A mature colony can de-foliate a tree overnight,” said Garret Suen, a post doctoral research fellow at the GL-BRC. “They’re really a major agricultural pest in the tropics. Anyone who farms oranges or papaya loathes leafcutters. If they get into a grove, they can devastate it overnight.”

It may seem counter-intuitive to look

to such a destructive pest for an economic benefi t to ethanol production, but this tiny nuisance could also provide a big benefi t from the enzymes it creates. Converting plant cell walls into simple sugars is a major challenge for scientists and leafcutter ants, which tend massive fungal gardens of their decaying byproducts, may present a worth-while solution. Researchers at the GLBRC are studying multiple enzymes used by the ants in the fungal gardens to craft the per-fect cocktail for ethanol production. “That cocktail is probably a mixture of about six or seven enzymes,” Suen said. “One is def-initely a cellulase that does the majority of the breaking of the beta -1,4 glycocitic link between the glucose and cellulose chain. But then there are other things, such as cellulose-binding modules, a protein which binds the cellulose itself, and then allows the cellulase to do its job.”

The researchers recently received a U.S. DOE grant to further study this cel-lulosic possibility, but prior to receiving

the grant the GLBRC was already studying the unique symbiotic relationship between the ants and their fungal gardens. Over 50 million years, the ants and the fungus have evolved to the degree that if the ants were to die, or are removed from the system, the fungus dies as well, and vice versa. “The fungus-growing ant system is obligate, and one of the most complex symbioses that’s described in nature,” Suen said.

Research at the GLBRC is providing a new look at some very old progress made in the ants’ natural communities. With the leafcutter ants, the mixture of enzymes works in balance, but that nuanced formu-la would be nearly impossible to synthesize in a lab. “There is a renaissance, and re-searchers are going back to natural com-munities—an area called natural products. These are novel compounds in that no one has ever seen them before,” Suen said.

—Craig A. Johnson

Leafcutter ants may provide cellulosic solution

Leafcutter ants build enormous nests that can house hundreds of thousands of ants. The leaves they collect for food also provide media for the cocktail of enzymes researchers may use for ethanol production.

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BP plc’s alternative fuels sector may have expanded this year to in-clude biobutanol, but the company continues to focus on cellulosic etha-nol. According to the company, the petroleum giant’s biofuels strategy is three-pronged and includes: advancing a sugarcane-to-ethanol business in Brazil, building a cellulosic biofuel business in the U.S., and developing advanced molecules such as biobutanol.

The fi rst step of BP’s plan to build its cellulosic presence in the U.S. is through its joint venture with Verenium Corp. to produce cellulosic ethanol in Florida. The 50-50 partnership, named Vercipia Biofuels, will commercialize technology that is currently being demonstrated at Vere-nium’s demonstration-scale facility in Jennings, La. Groundbreaking on the 36 MMgy Highlands County facility is set for this year, with commer-cial production scheduled to commence in 2012.

At a recent U.S. House of Representatives subcommittee hearing on second-generation biofuels, BP Biofuels North America LLC Presi-dent Susan Ellerbusch said the joint venture also has plans to develop a second site in the Gulf Coast and anticipates using energy crops, such as energy cane, as feedstock at all of its facilities. “We believe energy grasses will be an essential part of the future U.S. feedstock mix, given their

BP implements globalbiofuels strategy

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A road tanker refuels at the BP plc renewables demonstrator site in Hornchurch Connect, Essex, United Kingdom.

PH

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: BP

PLC

high yield, yield improvement potential and reduced pressure on land resources,” she said. “BP intends to broaden our energy grass feedstock portfolio [and] to continue to scale up the production capacity of future units as we move toward a cost structure that can compete with traditional transport fuel sources.”

However, while it continues to tout its investments in cellu-losic ethanol, BP offi cials are quick to point out some of the fuel’s challenges. BP Biofuels CEO Philip New told attendees at an Oct. 1 climate change seminar that the small percentage of ethanol cur-rently allowed for use in U.S. autos and the fuel’s inability to be transported via existing infrastructure have led BP to also develop biobutanol. “Biobutanol gives more miles per gallon than ethanol,” New said. “It can be blended in higher concentrations than ethanol. And it doesn’t mix with water, so we can easily put it into pumps, pipes and refi neries. It means that petrol fi rms will be able to com-ply with regulations at lower cost.”

BP’s biobutanol work is being conducted by Butamax Advanced Biofuels LLC, a joint venture developed in July 2009 between BP and DuPont Biofuels. The company plans to display some of its technology at a demonstration-scale facility in Hull, in the United Kingdom, this year. The fi rst commercial-scale biobutanol facility is expected to begin operating in 2013.

Additionally, Vivergo Fuels, a joint venture with DuPont and

British Sugar, is constructing a 110 MMgy wheat-to-ethanol pro-duction facility on a BP Chemicals site at Saltend, Hull. The plant is scheduled to be begin ethanol production in 2010, however, BP plans to convert the facility to produce biobutanol once its technol-ogy has been proven.

Ellerbusch told House members that BP views biobutanol us-age as a method to increase the use of biofuels. “BP believes biobu-tanol will help to accelerate the adoption of biofuels and assist in overcoming the blend wall, so that the U.S. can meet targets for reducing greenhouse gas emissions from transport more quickly,” she said.

The third prong of BP’s biofuels strategy is to increase its pres-ence in the Brazilian sugarcane-to-ethanol market. The company holds a 50 percent stake in Tropical BioEnergia SA, which currently operates one sugarcane-to-ethanol facility and plans to expand to several locations.

Of all of the alternative fuels BP is exploring, the company has made it clear that it does not view corn ethanol as a viable option. “Of the plethora of potential future technologies—photosynthetic algae, gasifi ed biomass, etc., we believe that the technologies most likely to continue to meet our selection criteria are those that in-volve the conversion of low-cost, low-carbon sugars,” New said.

—Kris Bevill

NO MATTER WHAT LIES AHEAD, WE’RE RIGHT BESIDE YOU ALL THE WAY.

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Researchers add cellulosome to yeast

Researchers at the University of California, Riverside (UCR) have successfully constructed a synthetic cellulosome in yeast. This development may have important implications for the cellulosic etha-nol industry by potentially allowing simultaneous hydrolysis and fer-mentation of cellulosic material, reducing the cost of production.

Cellulosomes are self-assembled structures naturally found on the exterior surfaces of certain bacteria that allow these organisms to effi ciently break down cellulosic material. The cellulosomes contain multiple types of cellulases, which are enzymes that break down cel-lulose, optimally spaced for maximum activity.

Essentially, cellulosomes are the structures certain bacteria use to degrade cellulose, said Wilfred Chen, a professor of chemical en-gineering at UCR who is leading the project. Rather than secreting cellulases such as fungus to, these bacteria actually anchor a whole bunch of different cellulases on their surface. This allows them to very effi ciently complete hydrolysis of the cellulose without using a lot of enzymes, Chen continued. “It’s a very clever way to increase the effi ciency,” he said.

While cellulosomes occur naturally on some bacteria, these bac-teria are not as ethanol-tolerant as yeast. By adding synthetic cellulo-

A University of California, Riverside research team led by Wilfred Chen, center, professor of chemical engineering, has constructed a synthetic cellulosome in yeast that has the potential to allow for the simultaneous hydrolysis and fermentation of cellulosic biomass.

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somes to yeast, it becomes possible to combine the hydrolysis and fermentation processes of cellulosic ethanol production.

The cellulosomes found in nature are much more complex than the ones Chen’s team has produced in the lab, at least to date. “[Those bacteria] typically have 19 to 20 cellulases that display on the surface in organized cellulosome structure,” Chen said. These cellu-lases complete hydrolysis of cellulose, allowing the bacteria to utilize the resulting sugar as a substrate for growth, he continued.

The experimental cellulosome created by Chen and his team contains three different cellulases. The yeast engineered with this cellulosome was able to multiply to high levels with cellulose as the only carbon source. Compared to controls engineered with one or two cellulases, the triple cellulase displaying yeast had higher rates of hydrolysis, demonstrating the benefi t of using diverse cellulytic enzymes in a single organism.

The use of multiple enzymes in the cellulosome greatly in-creases the effi ciency of hydrolysis because heterogeneous forms of cellulose can be digested. The artifi cial cellulosome developed by Chen and his team is modular, and can be engineered to display ten or more different cellulases. This composition of cellulases can be tuned to optimize hydrolysis for any feedstock.

While it would be possible to tailor yeast for specifi c feedstocks, Chen said the ideal solution is to create a system that is so intelligent it can adapt to any feedstock employed in the cellulosic ethanol pro-duction process. Although the synthetic cellulosome created by the

team has only three enzymes right now, Chen said future research will seek to create more complex structures.

“[This yeast] is the initial proof of concept,” Chen said. “What we want to do is try to build on what we know already and make much more complex structures.” He said the long term goal is to increase the number of cellulases to 10, 15 or more.

Ultimately, the yeast cellulosome could enable an effi cient one-step consolidated bioprocessing method by maximizing the catalytic effi ciency of cellulosic hydrolysis with simultaneous fermentation. A process employing this kind of engineered yeast could potentially make the production of cellulosic ethanol more effi cient and eco-nomical.

While the researchers have not been working with yeast that has been genetically enhanced to optimize ethanol production, Chen said that could be part of his team’s future research. “Certainly we want to combine [the results] with some of the other genetically engineered yeast that have been proven to produce a lot of ethanol in the fu-ture,” he said.

According to Chen, the research project has been ongoing for about a year and half. In late 2009, the team received a three-year grant from the U.S. DOE that will support additional research on synthetic cellulosomes. The research has also been funded in part through a grant awarded by the National Science Foundation.

—Erin Voegele

29


ow important is the Growth Energy Green Jobs Waiver? To the ethanol industry, it represents a move toward market opportunity—establishing as much as 6 billion gallons of new capacity—at a time when our industry has recently seen

ethanol plants go idle and capital investment into new tech-nologies, such as cellulosic, dry up.

Growth Energy fi led the Green Jobs Waiver in March because we believe the science, technology and econom-ics behind the requirements laid out by the Clean Air Act to raise the blend wall from E10 to E15. If the U.S. EPA grants the waiver, as we believe it should, the agency will be acting on proven data: there is more science for E15 than there ever was for E10 when that was set as regula-tion in the 1970s.

If EPA approves the Green Jobs Waiver, it will be doing more than creating new market opportunity for the ethanol industry. The agency will help the domestic ethanol industry meet its greatest potential—to help our country create U.S. jobs, reduce pollution, and strengthen our national security by lessening our dependence on foreign oil. These goals all lie at the heart of why Growth Energy was created.

Each of the major achievements seen by Growth En-ergy since its inception more than one year ago have been good for the ethanol industry and good for rural communi-ties, but they have been just as important for the nation.

In the “food versus fuel” debate, Growth Energy for-mulated the counter-attack to answer the multimillion-dollar propaganda blitz waged on ethanol and corn farmers by Big Food and Big Oil. The Growth Energy website still in-cludes a clock that keeps a running tab of the number of days since Growth Energy fi rst demanded an apology from

the Grocery Manufacturers Association for its misleading attacks.

When the California Air Resources Board began its process to regulate ethanol, and included controversial in-ternational indirect land use change (ILUC) carbon penal-ties on biofuels, it was Growth Energy that amassed the body of technical data challenging CARB on the facts. We continue to fi ght CARB’s poorly conceived regulations.

On ILUC, Growth Energy representatives persuaded the House of Representatives to amend its climate change legislation in order to nullify the toxic ILUC provision of the 2007 Energy Act that would penalize ethanol as part of the renewable fuel standard.

And ultimately, there was the Growth Energy Green Jobs Waiver. We knew that the best way to increase mar-ket demand for ethanol in the United States was to seek a waiver with the EPA to raise the blend; since 1978, the EPA has granted 11 waivers for fuel additives—the fi rst being for E10. The Growth Energy Green Jobs Waiver contains more technical data, third-party testing and independent studies than that of any approved EPA waiver request.

The Green Jobs Waiver will ultimately do more than help the ethanol industry. An E15 blend could create 136,000 new jobs in the United States, eliminate the carbon that would have been released from the burning of gaso-line, and reduce the amount of oil that is imported into the United States.

Even without the science behind the Growth Energy Green Jobs Waiver, who couldn’t support that?

Tom Buis is the CEO of Growth Energy. Reach him at [email protected] or (402) 932-0567.

What Green Jobs Waiver Means for USBy Tom Buis

DRIVE

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he increased role of grain sorghum in the etha-nol production process in the U.S. is a prom-ising development for those who have spent a lifetime accepting the uncertainties of the mar-ket. But this is not a time to be complacent. I

often recall the words of Will Rogers, “Even if you’re on the right track, you’ll get run over if you just sit there.”

While the biofuels industry is continually evolving, it is imperative to understand not only the needs of ethanol pro-ducers, but their perceptions about sorghum. To that end, the United Sorghum Checkoff Program commissioned a survey by Agri-Energy Solutions Inc. on the use of sorghum in the ethanol industry. Unfortunately, surveys and research are often manipulated by those seeking to enhance their reputation. We viewed this research as a learning tool: how can we better serve our customers? Positive feedback tells us we’re heading in the right direction. Misperceptions tell us there is a need to raise awareness of the benefi ts of sorghum as a feedstock in the ethanol industry.

In 2009, more than one-quarter of total domestic grain sorghum production was used in the U.S. grain-to-ethanol market. The increased utilization of sorghum by ethanol plants in the past two years is a signifi cant step towards the USCP’s strategic goal of increasing sorghum use in the eth-anol industry by 50 percent by 2011. Even slight increases in demand could mean half of the Kansas sorghum crop could be used to produce ethanol in 2010.

The facts are clear: grain sorghum offers a lower cost alternative to higher priced corn for manufacturing ethanol, with similar output rates of production. But grain sorghum needs to be recognized for benefi ts other than cost. And as they say, the devil is in the details. In comparison to many other crops, sorghum has very little consumer awareness beyond the friendly confi nes of sorghum country.

Declining sorghum acres and production have led to decreased private investment in sorghum. These declines brought about not only a “technology gap” between sor-ghum and other crops such as corn and cotton, but a po-tential “perception gap.” The Agri-Energy survey provides the information that will enable USCP to close that gap.

Some of the concerns raised by ethanol producers provide an avenue to speak to those within the sorghum industry about the opportunities as well as the perceived weaknesses for sorghum. The survey found that some respondents are concerned that there is not a consistent supply of sorghum, or that grain sorghum production in the U.S. does not meet with its demand potential. This under-scores the need for a comprehensive education program for grain sorghum producers who sell to ethanol markets and for ethanol marketers who purchase grain sorghum.

We’re working to illuminate the value of using grain sorghum in the ethanol production process. Grain-based ethanol plants in areas where grain sorghum can be grown will benefi t because of its price differential and availability. Ethanol conversion kits created by the USCP are being distributed to plants across the U.S. These interactive kits provide a detailed look at the costs and technical aspects of using grain sorghum in the ethanol production process. This is the fi rst time in the industry that a “calculator” has been created to provide bottom line numbers for sorghum and ethanol.

In the new year, we are looking to not only expand upon opportunities within the biofuels arena, but also de-velop greater consumer awareness of sorghum.

Bill Greving is chairman of the United Sorghum Checkoff Program. Reach him at [email protected].

Efforts to Increase Sorghum Awareness UnderwayBy Bill Greving

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Carbon Opportunities for Ethanol PlantsBy Jesse McCurry

espite the backlog of front-burner issues fac-ing President Barack Obama and Congress, many analysts believe carbon legislation is a matter not of “if” but “when.”

“Certainly the health, appropriations and energy bills—and just the sheer lack of time—make it a cloudy proposition though,” said Sara Hessenfl ow Harper, a partner with Washington-area environmental consulting group The Clark Group LLC.

According to Hessenfl ow Harper, a real break-through occurred when many members of the agricul-ture industry came to the table to engage. This was an important step because, as Hessenfl ow Harper says, “If you are not at the table, you are on the menu.” Many major farm groups eventually came to oppose carbon legislation outright, but their willingness to participate at least found some offset provisions for agriculture.

“The ethanol industry needs to help shape what-ever comes out of a climate bill,” Hessenfl ow Harper said. “There are plenty of folks who want to attribute the destruction of the rain forest to ethanol and claim that it is even more carbon intensive than gasoline. A new market is going to be created nonetheless, and whether ethanol is treated fairly in that system is critical. The industry needs to not only oppose ‘bad stuff,’ but also come up with better alternatives.”

Kennedy and Coe LLC partners to help plants comply with increased regulations—and identify some new revenue opportunities in the process. “Between re-newable identifi cation numbers, tax fi lings, the U.S. EPA and now carbon credits, it is our obligation to help posi-tion plants to mitigate risk and perhaps fi nd added rev-

enue opportunity,” said Donna Funk, member in charge of the fi rm’s biofuels practice. “We’ll bring in additional resources as necessary that we trust.”

Currently there are no federal compliance rules or methodology regarding carbon. Garth Boyd, senior vice president for agricultural services at Camco, a private international climate change and sustainable develop-ment company, offers ethanol plants a number of servic-es related to carbon. “Today the market is voluntary,” he said. “Companies interested in corporate sustainability are buying carbon credits to either decrease or offset their carbon footprint. They fi nd that it is good for their green image or for shareholder approval.”

Camco offers an alternative to the Chicago Climate Exchange. “We are not a trade platform or a registry,” Boyd said. “We create and sell carbon and provide gen-eral consulting to help companies understand what risk they have in a mandated carbon environment. We also invest in projects that have potential to create carbon credits.”

Boyd said Camco’s international experience and understanding of rigorous international protocols such as the Kyoto Protocol will put his company ahead of the curve once similar mandates come to the United States.

“Big companies all around the world (many of which are big polluters) need to synch up with those that have credits to offer,” he said.

Jesse McCurry works in business development for Ken-nedy and Coe LLC, a leading accounting and consult-ing fi rm focused on renewable energy. Reach him at [email protected] or (316) 691-3758.

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SALARY

US Ethanol Industry Salary Survey

Back by popular demand, EPM presents the results of its recently conducted salary survey of

U.S. ethanol plant personnel.

By Erin Voegele


20102010

It’s been a few years, but EPM has once again conducted a salary sur-vey of ethanol plant personnel in the U.S. To complete the survey,

EPM editorial staff formulated a series of 26 questions designed to gather basic demographic data about the employee, as well as information related to the facility where the respondent is employed.

The survey was conducted exclu-sively online during the last two weeks of October and was distributed to more than 1,200 potential respondents. Nearly one-quarter of those who received an invita-tion participated in the survey. Respon-dents self-reported the data and, because EPM did not gather the data using ran-dom sampling techniques, results may not be representative of the ethanol industry as a whole. Rather, this salary survey was conducted to provide an interesting snap-shot of the respondents’ employment specifi cs at a single point in time.

Basic Demographic DataAlmost half (47 percent) of survey

respondents reported being employed by ethanol facilities with annual produc-tion capacities of 40 MMgy to 59 MMgy, while 28 percent were employed by facili-ties that produce more than 100 MMgy.Nearly half of respondents (49 percent) have earned a four-year college degree, with an additional 23 percent report-ing that they graduated from a two-year technical college.. This is fairly consistent with EPM’s 2006 Salary Survey, in which 72 percent of respondents claimed to be college graduates.

The majority of survey respondents (76 percent) were men. However, the number of women working in the etha-nol industry appears to have increased dramatically over the past three years. In 2006, only 15 percent of EPM’s survey respondents were women. This year, 24 percent of the participants were female.

Approximately 60 percent of survey

respondents reported that they held some sort of management position within their current company, and only 2 percent re-ported they currently work part-time.

Work ExperienceThe majority of survey participants

told EPM they are relatively new employ-ees at their current company, with 74 per-cent stating they have been with their cur-

Job Satisfaction Factors

Challenging Work 0% 1% 18% 53% 27%

Positive Atmosphere/ 0% 0% 4% 36% 60%Morale

Competitive Salary 0% 0% 10% 42% 47%

Benefits Package 1% 1% 9% 47% 42%

Job Security 0% 2% 7% 36% 55%

Oppprtunity for 2% 7% 29% 40% 22%Advancement

Recognition by 1% 10% 27% 37% 23%Employers/Peers

Working for the 6% 14% 31% 33% 16%Reneawble Fuels Industry

Not important

Somewhat Unimportant

Neutral Important Extremely Important

Reported Bonuses By Job Title Amount of Bonus

General Manager/CEO/Corporate Management 45% 55% 25% 17% 33% 25%Controller/CFC 25% 75% 67% 22% 11% 0%Plant/Operations Manager 38% 62% 65% 24% 9% 3%Plant Engineer 67% 33% 100% 0% 0% 0%Commodities Manager 33% 67% 75% 25% 0% 0%Maintenance Manager 36% 64% 100% 0% 0% 0%EH&S Manager 33% 67% 100% 0% 0% 0%Lab Manager 44% 56% 100% 0% 0% 0%Lab Technician 50% 50% 100% 0% 0% 0%Lead Operator/Operator 48% 52% 100% 0% 0% 0%Administrative 74% 26% 100% 0% 0% 0%Other - Managerment 50% 50% 80% 20% 0% 0%Other - Non-Management 40% 60% 89% 11% 0% 0%

No Bonus in the Past 12 Months

Received a Bonus in the

Past 12 Months

Less than $10,000

$10,000--$24,000

$25,000-$49,000

$50,000 or More

A positive atmosphere, job security and competitive salary top the list of factors most important to job satisfaction. However, working in the renewable fuels industry is not a major factor in the survey participants' job satisfaction.

The majority of bonuses awarded to survey respondents during the past 12 months were received by those . The upper management positions. One quarter of those identifi ed as general managers, CEOs or corporate management reported receiving bonuses of $50,000 or more.

SALARY


rent employer for only one to fi ve years. Only 8 percent of respondents reported being employed by their current company for more than 10 years.

Only two respondents (less than 1 percent) reported having been laid off from their current position during the past 12 months. These fi gures may not be representative of the ethanol industry as whole, however, because survey invita-tions were primarily sent to work email addresses, rather than home addresses. Therefore, it is unlikely that workers who were laid off at the time of the survey participated. This is also true of those who may have lost their job due to a bankruptcy. Given the current state of the economy, it may be surprising that only 5 percent of respondents indicated they had been forced to take a pay cut during the past 12 months.

When responding to a question on work history, participants reported prior employment in a wide range of industries. The three most common answers were agricultural, industrial manufacturing and food and beverage industries. However, 79 percent of respondents claim to have gained the majority of their employment experience in the ethanol industry. This is a substantial increase over EPM’s 2006 Salary Survey results, in which only 35 percent of respondents indicated they

had obtained the majority of their work experience in the ethanol industry.

Salary, Benefi ts and BonusesReported salaries ranged from less than

$40,000 per year to more than $150,000 per year, with only 4 percent reporting an an-nual salary of more than $150,000 and 17 percent indicating that they earn less than $40,000 per year. The most often reported salary level was in the $60,000 to $75,000 per year range, which represented 22 per-cent of respondents. Other salary cat-egories—$40,000 to $49,000; $50,000 to $59,000; $75,000 to $99,000 and $100,000 to $149,000 per year—were nearly evenly split, with 14 percent to 15 percent of re-spondents reporting each.

Given the fi nancial hardships expe-rienced by the ethanol industry recently, it was surprising that slightly more than half of the respondents reported receiv-ing a monetary bonus during the past 12 months. Of the 55 percent of respon-dents who claimed they had received a bonus, 78 percent reported bonuses of less than $10,000. However, 3 percent reported receiving a bonus of more than $50,000. By comparison, EPM’s 2006 Sal-ary Survey showed that 63 percent of re-spondents claimed to receive a bonus in the prior year, with an average bonus of $17,300.

Of the 51 percent of respondents who received a raise in the past 12 months, only 18 percent reported that the

SALARY

There are financial parasites within every business that

would like nothing better than to feed off of your blood,

sweat and tears. We’re not your average accountants.

W e k n o w w h a t ’ s s u c k i n g y o u d r y .

K C O E . C O M o r 8 0 0 . 3 0 3 . 3 2 4 1


Less than $40,000

$40,000-$49,999

$50,000-$59,999

$60,000-$74,999

$75,000-$99,999

$100,000-$149,999

More than $150,000

Gross Annual Salary by Education Level Achieved

Graduate of 4-year University 34% 32% 50% 46% 41% 69% 91%

Graduate of Technical College 29% 35% 24% 17% 16% 17% 9%

Some College or Training 20% 21% 15% 19% 35% 11% 0%

High School Graduate 12% 12% 6% 17% 5% 0% 0%

Results of EPM's 2010 Salary Survey show that employees with more extensive educational backgrounds earn higher salaries.

raise was given due to a promotion and/or change in responsibility. Approximate-ly 63 percent of those who received raises reported an income increase of less than 5 percent. Just under one-quarter (24 per-cent) of respondents said they are very satisfi ed with their total compensation package, and only 5 percent of respon-dents claimed to be very unsatisfi ed with their current compensation packages.

When comparing their salaries in the

ethanol industry to what they believe oth-ers in the industrial sector earn, only 11 percent of EPM’s salary respondents said they believe they are compensated better than average. Nearly half (47 percent) re-ported comparable salary levels. This is fairly consistent with EPM’s 2006 Salary Survey, in which 59 percent of respon-dents said they felt they were compensat-ed “about right” for what they do.

When asked about opportunities for

advancement within their current facility, only 22 percent reported that these op-portunities existed. This fell to 19 percent when asked if opportunities for advance-ment were found outside their current fa-cility, but within their current company.

Although the past 12 months have proven to be a diffi cult time for the eth-anol industry, results of EPM’s Salary Survey seem to reveal some positive in-dications. Nearly three-fourths of those surveyed reported annual salaries of more than $50,000, which indicates that ethanol plants provide their local commu-nities with well- paying jobs. In addition, ethanol companies seem to be ahead of the curve when it comes to providing em-ployee benefi ts. Although the U.S. Bureau of Labor Statistics shows that only 71 percent of private industry workers had access to employer-provided health insur-ance in 2008, 99 percent of EPM’s survey respondents indicated that they receive health insurance benefi ts. EP

Erin Voegele is an Ethanol Producer Magazine associate editor. Reach her at [email protected] or (701) 373-8040.

SALARY


Less than $40,000

$40,000-$49,999

$50,000-$59,999

$60,000-$74,999

$75,000-$99,999

$100,000-$149,999

More than $150,000

Salary by Job Title

General Manager/CEO/Corporate Management 0% 0% 0% 10% 0% 48% 38%Controller/CFC 0% 0% 0% 25% 25% 50% 0%Plant/Operations Manager 0% 0% 4% 30% 40% 21% 6%Plant Engineer 0% 0% 33% 22% 22% 22% 0%Commodities Manager 0% 0% 17% 42% 17% 25% 0%Maintenance Manager 0% 0% 7% 57% 29% 7% 0%EH&S Manager 8% 23% 31% 31% 8% 0% 0%Lab Manager 11% 22% 50% 17% 0% 0% 0%Lab Technician 80% 20% 0% 0% 0% 0% 0%Lead Operator/Operator 24% 52% 21% 3% 0% 0% 0%Administrative 68% 21% 5% 5% 0% 0% 0%Other - Managerment 6% 22% 11% 28% 22% 11% 0%Other - Non-Management 53% 0% 20% 27% 0% 0% 0%

Management-level positions at ethanol facilities earn more than double the salaries of non-management positions, according to EPM survey respondents.

EMPLOYMENT

Workers Available, Ethanol Producers Wanted

Representatives of the ethanol industry often list an increase of domestic jobs as one of the many reasons why ethanol production would benefi t the United States. While these jobs are often thought to be new jobs, ethanol could also play a signifi cant role in replenishing jobs that have been lost in other industries.

By Kris Bevill

Bastrop, La., population 12,988, is home for a large number of skilled laborers who recently became unemployed due to the closure of the town’s International Paper pulp mill. The community is actively recruiting renewable fuels as a replacement industry.PHOTO: MOREHOUSE ECONOMIC DEVELOPMENT CORP.


EMPLOYMENT


Morehouse Parish and the city of Bastrop, La., suffered a devastating economic loss in No-

vember 2008 when International Paper announced it would permanently close the pulp mill it had operated there for more than 80 years. The company’s deci-sion was not a surprise to the community. It’s been no secret that the paper indus-try has been lagging in recent years and a weak market and oversupply of product proved to be too much to keep the plant profi table. But for the 12,988 people who live in Bastrop, and particularly the 550 skilled laborers who were employed at the facility, lost jobs meant that commuting or moving out of the area was almost cer-tainly their ultimate fate. Parish leaders, determined to keep a mass exodus to oth-er communities from happening, teamed with state offi cials to launch economic recovery efforts. It wasn’t long before it became apparent that biofuels could be their solution.

“It was a huge blow to the city to lose the plant,” says Kelsey Short, director of agriculture, food and forestry for Lousi-ana’s economic development agency. “It was probably one of our biggest eco-nomic development blows, particularly because it happened in a small commu-nity. The irony about Bastrop was that IP indicated that it was really a very produc-tive, hard-working workforce. It was just that the plant had not been kept up be-cause of a lack of reinvestment capital.”

As the state economic development offi ce representative, Short set out to meet with Morehouse Economic Devel-

opment Corp. members to work on fi nd-ing a replacement for the IP facility. The fi rst item on the state’s do-to list was to provide funds to hire recovery planning experts. Mandeville, La.-based Taimerica Management Co. was chosen for the job and was tasked with identifying target re-placement industries for the area. Short said it was obvious early on that bioener-gy was a good fi t to replace the hole that had been made locally by the shutdown of the paper mill. “If you look around the country, there have been other instances where paper mills have been redeveloped into some type of bioenergy assets,” he says.

Workforce AvailabilityOne of the major reasons for this

easy transition from the paper industry to the biofuels industry is workforce adapt-ability. Taimerica reported in its recovery strategy for Bastrop that the pulp and pa-per industry has an unusually large con-centration of blue-collar skilled trades, including industrial maintenance mechan-ics, stationary engineers and electricians. These skill sets fi t closely with those in the metal fabrication, food processing and chemical processing industries—which includes ethanol and biodiesel pro-duction.

Kay King, president and CEO of the MEDC, says most of the skilled workers who held jobs at the IP mill are still in the area. “We know that the more time goes by [since the mill’s closing], some of the workforce will begin to fi lter out of the area,” she says. “So, we’d like to capture another company into the area before we

lose that workforce.” According to King, approximately 30 percent of the former IP workers are commuting to jobs at oth-er paper mills in the area.

Short says Taimerica identifi ed the parish’s workforce as being “sticky”—meaning that residents are unwilling to relocate and will often commute or take lower-paying jobs in order to stay in the community. Short says this situation is typical in Louisiana. However, in order for residents to obtain even low-paying jobs, there must be jobs to apply for. This has been a problem in Morehouse Parish. Unemployment rates in the parish reached 16 percent in September, the highest King has seen in the fi ve years since she joined the economic development team.

Bastrop Mayor Betty Olive says while unemployment has been rather high in re-cent months, the community is resilient. “Our unemployment rate has been up compared to last year, but the govern-ment has been supportive of our recov-ery plan and that’s what we’re focused on,” she says.

AdvantagesA qualifi ed, available workforce is es-

sential for any industry considering a new location, but perhaps equally important

for ethanol producers is the availability of nearby feedstocks. Short says the area surrounding Bastrop is ripe with options for both corn and cellulosic producers.

According to Short, Bastrop is situ-ated on the edge of the grain producing area in northeastern Louisiana. In recent years many farmers in the area have shift-ed their acreage away from cotton and into corn. More than 600,000 acres of feedgrains were harvested in that area in 2008.

In addition to corn, woody biomass is also abundant. Areas to the west, north and south of Bastrop comprise what is known as a “wood basket” and offer a multitude of cellulosic feedstock, as illus-trated by IP’s annual use of 1.5 million tons of locally obtained pulp wood at its Bastrop facility. “So, while there’s not yet a commercial cellulosic ethanol opera-tion, that area could be an ideal location for something like that,” Short says.

Bastrop, and specifi cally the mill property, also has access to other vital components necessary for ethanol pro-duction. The mill has direct rail access to two major rail lines and has two on-site power turbines capable of producing ap-proximately 40 megawatts of energy. The community can handle 1 million gallons

The recently closed International Paper mill in Bastrop, La., boasts close proximity to major rail lines as well as multiple feedstocks and water supplies.

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EMPLOYMENT

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per day of waste water and is located on the edge of the Mississippi River fl ood-plain, which benefi ts local agricultural practices.

DrawbacksWhile biofuels is

near the top of Bas-trop’s list for an ideal replacement industry, the mill is still owned by IP and it will decide what company can purchase the site. This could pose a potential roadblock for producers who want to utilize woody biomass, because IP still operates mills in the area. According to King, “It’s going to have to be a company that IP feels is not going to compete with them, and the competi-tion goes a little deeper than just produc-ing paper. The competition is going to be about the wood basket.”

Financing is always an issue for etha-nol producers and so far, that doesn’t ap-pear to be any different for potential buy-ers of the Bastrop location. Short says there have already been some ethanol producers, as well as wood-to-electricity companies, to review the site, but they have all expressed concern about ac-quiring fi nancing. To that end, the state and the local community are willing to do whatever is necessary to facilitate an economically feasible project. Louisiana has not developed a funding program specifi cally for biofuels, but Short says there are other incentive packages geared toward manufacturers that ethanol facili-ties would qualify for, including a 10-year property tax exemption, a payroll rebate and discretionary funds for infrastructure upgrades. “[If] there’s a need for a road or a bridge or natural gas line or something like that, we can come to bear,” he says. “We’re very anxious to put industry and commerce back into the Bastrop com-munity, so we probably would be fairly aggressive with any kind of discretion-ary incentives for companies looking to invest in the area.” The state has placed a

high priority on fi lling the vacant mill be-cause of its economic impact on the local community.

Olive says the community at large would be supportive of an industry

such as ethanol, but importance will be placed on it being envi-ronmentally friendly and its abil-

ity to provide long-term stability to the community.

According to King, the residents of

Bastrop would be “very toler-ant” to a biofuel

project, because they are accus-tomed to having

a paper mill operate in their community and are also located close to a large power plant and chemical facility. “I think we’re a little more open to some things that other people might not be open to,” she says.

Ideally, King would like 550 jobs to return to the community, but realistically, “I think the community would be happy even if we could get a couple of hundred jobs back right now.” The fact that Bas-trop was home to such a large, single em-ployer for so long makes fi nding a replace-ment diffi cult, according to King, and the community is willing to adapt. “It’s hard for other businesses to come in and com-pete with a large paper mill,” she says. “As [the paper] industry began to decline, we lost that emerging growth industry char-acteristic and became [part of] a mature and declining industry. It becomes very diffi cult to bring new industries into the area. We have been dominated by a very large industry for 80 years and we’d like to diversify into some other companies that might employ 50, 100, 200 employ-ees, because that makes a much stronger economy. We realize that many of the biofuels companies are in the 50 to 100 jobs category, but we’re willing to work very hard for a 50-job company.” EP

Kris Bevill is the editor of Ethanol Pro-ducer Magazine. Reach her at (701) 373-8044 or [email protected].

EMPLOYMENT


EDUCATION

Ethanol Education: A Window to EmploymentLike most businesses, ethanol companies employ a variety of white-collar professionals. However, ethanol plants also need skilled workers who possess knowledge of ethanol-specifi c process technologies and plant operations. To fi ll this niche, an increasing number of community colleges have begun to offer biofuels-specifi c training programs.

By Erin Voegele


EDUCATION


primary goal of most com-munity colleges is to pro-vide students with a dis-crete set of skills that can be used to secure employ-

ment. “As a two-year college, we obvi-ously are not a research institute; we are not trying to develop new processes or research cellulosic ethanol production,” says Duane Carrow, director of renew-able energy programs at Minnesota West Community & Technical College. “What we focus on is the application of re-search, and we can adapt very quickly.”

Minnesota West began to offer an ethanol-specifi c training program in 2000. According to Carrow, the program began as an initiative of the Minnesota Coalition for Ethanol. The coalition ap-proached the college and expressed a need for employees who had the proper skills sets for work in an ethanol plant.

“To the best of my knowledge, it was the fi rst program in the nation to fo-cus on ethanol production,” Carrow says. “To develop this program, we worked very closely with industry to identify the skill sets that they needed for good em-ployees [and] in particular, production employees. That is what we focus on—training operators.”

The biofuels technology program at Minnesota West in Granite Falls, Minn., focuses exclusively on ethanol and biodiesel production processes, with emphasis biology, chemistry and process control. This includes training related to the mechanical fundamentals of operat-ing plant equipment, as well as operating mechanical equipment in a distributed control system.

Minnesota West recently installed an ethanol plant simulator which allows students to essentially run a virtual etha-nol plant from the classroom. As part of the simulation program, Carrow says the instructor is able to introduce process disturbances into plant operations, allow-ing students to practice plant operations without endangering personnel or dam-

aging equipment. “The simulator seems to be a very effective capstone course for students who have learned all about the ethanol process,” he says. In addition to training students, Minnesota West is us-ing the simulator to assist ethanol plants in cross-training and to expand the skill sets of their current employees.

Beginning in 2009, Minnesota West also began offering an Energy Technical Specialist program. Although the pro-gram offers students a broader range of skills that can be transferred to a wide variety of energy industries, it includes some training specifi c to biofuels pro-duction. The program is also being of-fered at eight other community colleges within the Minnesota State Colleges and Universities system.

In North Dakota, Bismarck State College has offered a Process Plant Technology program since the early 1980s, which has been expanded in re-cent years to provide biofuels-specifi c training. “We took our process program and tweaked it, added to it and modifi ed it to include curriculum that focuses on ethanol and biofuels,” says Dan Schmidt, a program manager at BSC’s National Energy Center for Excellence. “The cur-riculum is designed to expose students to the equipment, the process fl ows and systems, safety issues and operator du-ties that an energy-level operator would be responsible for when they get hired at a plant.”

In addition to its two-year associate-level program, BSC began offering a four-year bachelor’s degree program in energy management in 2008. According to Schmidt, the bachelors program is an opportunity for graduates from a two-year technical program to expand their skills in order to qualify for a promotion into a management or supervisor role at their company. Because it is aimed at prospective students already in the work-force, the bachelor’s degree program is offered exclusively online.

Lake Area Technical Institute in

South Dakota offers two programs that prepare students for employment in the ethanol industry. While neither program focuses solely on biofuels production, each program includes biofuels-specifi c coursework.

According to Roger Solum, depart-ment head and instructor for LATI’s En-ergy Operations program, LATI added biofuels training to its course offering af-ter recognizing that local ethanol plants were in need of properly trained employ-ees. “We’re here basically because the in-dustry asked us to be here,” he says.

Northeast Community College in Nebraska recently began to offer a biofu-els program as well. In 2007, the college implemented a Renewable Fuels Technol-ogy program. “The degree covers pretty much all of the ethanol fundamentals that new prospective hires would need at a typical dry mill ethanol plant,” says program instructor Randall Sigle. This includes basics such as math and biology, as well as safety requirements, piping and instrumentation, diagrams, reading blue-prints and ethanol process fundamentals. The program also employs a computer simulation model that mirrors the op-eration of an ethanol plant, allowing stu-dents to gain more hands-on experience in plant operations.

According to Sigle, NECC’s Re-newable Fuels Technology program was funded with a $2 million grant from the U.S. Department of Labor. In addition to offering courses for credit on campus, the college offers continuing education to ethanol plant employees through on-site training seminars. Last summer, ap-proximately 500 plant employees partici-pated in the seminars.

Although many programs focus on large-scale industrial plant operations, some biofuels training programs are geared toward smaller-scale production. At Central Carolina Community Col-lege in North Carolina, the Alternative Energy Technology program, launched in 2008, specializes in training on small-

A

scale on-farm production. The program also currently places more focus on biodiesel production because no commercial-scale ethanol plants current exist within the state.

Similarly, the Energy Technology program at Miles Community College in Montana places a greater emphasis on agricultural issues than many Midwestern programs. “We are in a really rural farming-type community,” says Kristin Buck, MCC’s science technology instructor. “So, we have a little more agricultural involvement than some of the other schools that focus more on process control.”

MCC’s program was also funded through a government grant, and is currently in its fi rst year. Although the program includes cur-riculum related to both ethanol and biodiesel production, Buck says the program currently focuses more on biodiesel, only because no commercial-scale ethanol plants are located near the college.

Student Enrollment and PlacementEnrollment patterns in ethanol training programs seem to mirror

the state of the industry. “The challenges in ethanol education pretty much follow the challenges, or peaks and valleys that are subject to the industry,” Sigle says. “In 2007, it was very easy to recruit students because new plants were being built. By 2008, it became a little bit more diffi cult to recruit students. The ethanol industry has followed a wave-like fl uctuation, and it has affected the ethanol training program the same way.”

Carrow agrees that enrollment seems to ebb and fl ow with the state of the industry, but also notes that he has seen increased inter-est from nontraditional students who have been displaced by the re-

cession. This includes current ethanol plant employees who want to upgrade their skills as well as displaced workers who are looking to change career paths.

According to Schmidt, BSC has seen a 30 percent increase in enrollment in its program since 2007. “We have experienced a lot of growth in all of our programs over the past couple of years,” he says, adding that much of the growth has been via online enrollment.

EDUCATION

INTERNATIONAL

MAY 4-6, 2010MINNEAPOLISCONVENTION CENTERMINNEAPOLIS, MINNESOTA

SAVE THE DATE!


The inaugural graduating class of Norfolk, Neb.-based Northeast Community College's renewable fuels technology program, shown here, entered into the industry in 2009. Despite the volatile state of the industry at the time, every graduate who sought a job in the ethanol industry found one, according to program instructor Randall Sigle.

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Solum says the programs offered by LATI are fi lled and that each class primarily consists of traditional students. “We have a handful of nontraditional students as well that may have been displaced in some other market with the slowdown in employment in manufacturing.”

Although a number of biofuels programs are relatively new and have yet to graduate a signifi cant number of students, programs that have graduated students report placement rates of more than 90 per-cent. In general, all graduates who have sought employment at an etha-nol plant have been able to fi nd work.

Evolving for Cellulosic Advisory boards play a large role in shaping the curriculum at

community colleges. These boards are made up of local industry rep-resentatives that work with faculty members to ensure that students receive the most up-to-date training possible. As the ethanol industry moves to second- and third-generation production technologies, these boards are expected to be an integral force driving innovation in the programs.

Sigle says community colleges such as NECC excel at keeping up with current industry trends, and says advisory boards play a large role in helping to guide areas of study. “We get feedback from the industry on what their needs are, what the newest opportunities are, and what the new promising technologies will be,” he says. “We put a great deal of effort into trying to stay well-informed about new technologies and new opportunities—where the industry is headed as well as the chal-lenges within the industry.”

“Part of our job is to identify the new technology needs and then modify our curriculum to meet new technology, because our students need to be prepared for new concepts all the time,” Solum says. “We have a very fl uid curriculum that we are allowed to massage and mold as the industry requires us to.”

According to Sigle, alterations have continually been made to NECC’s biofuels program as technology changes. He says this is not only true of big changes, such as the move to cellulosic, but also smaller technology changes, such as the deployment of fractionation technol-ogies. “Sometimes it’s not just about large separations in technology…sometimes it’s about optimizing and tweaking an existing process and adding value to what plants are currently doing.”

“It’s important that we continue to recruit and train people for the ethanol industry,” Sigle says. “My personal belief is that the ethanol industry will continue to grow and be a dynamic industry.”

“Even though there might be a lot of negative publicity about ethanol, most of the facilities are now running again,” Carrow says. “Obviously those facilities need employees. Those jobs are still there and the industry needs people. There might not be new facilities being constructed right now, but hopefully we will see another surge in facil-ity construction as cellulosic ethanol becomes more viable.” EP

Erin Voegele is an Ethanol Producer Magazine associate editor. Reach her at [email protected] or (701) 373-8040.

EDUCATION

SUBSIDIES

A long-time sustainable agriculture advocate proposes a producer tax credit tied to performance.

By Susanne Retka Schill


SUBSIDIES


Loni Kemp has a vision for re-warding better biofuels that won recognition in the Farm Founda-tion’s “30-Year Challenge: Agri-

culture’s Strategic Role in Feeding and Fuel-ing a Growing World.” The long-established think tank for agricultural policy sought pa-pers proposing new policy strategies. Kemp won the recognition in the climate change category for her well-developed proposal for a Greener Biofuels Tax Credit to re-place existing blender tax credits by shifting the subsidies towards performance-based tax credits to biofuel producers who are improving their environmental and green-house gas footprints.

Kemp knows the impact ethanol has had on farm communities. She lives in rural southeastern Minnesota a few miles away from a farmer-owned corn ethanol plant. Permeable ground formations in the area make water aquifers susceptible to leached contaminants, which has motivated her

to work on water quality policy. For more than 20 years Kemp has worked with the Sustainable Ag Coalition, a policy-oriented union of environmental groups and groups advocating sustainable agriculture and rural development, among which are the Minnesota Project and the Center for Rural Affairs. The cur-rent USDA Conservation Stew-ardship Program carries the fi n-gerprints of the coalition, which has steadily worked to improve environmental and conservation provisions in the Farm Bill.

The CSP also provides an important tool for Kemp’s pro-posal. “We now have a measure-ment tool that provides a really good model on how you score the outcomes of conservation practices,” she explains. Developed for the 2008 Con-servation Stewardship Program, the Soil and Water Evaluation Tool is based on site-

specifi c soils, climate and crops, calculating an environmental performance score for a specifi c farm, incorporating soil and water quality measurements. Kemp says the evalu-ation tool could possibly be used as is, or be

streamlined to apply to biofuels feedstocks. She points out the CSP program is well accepted, receiving three times the num-ber of applications in the last sign-up period than the program could accept.

In the Greener Biofuels Tax Credit proposal, assuming the total tax credit were $1 per gallon, up to 50 cents of it would be allocated to biofuel feedstocks based on their environmental performance. The other half of

the tax credit would be based on GHG re-duction performance and tied to the struc-ture created by the U.S. EPA to implement the renewable fuel standard (RFS). “What

Loni Kemppolicy analyst,Kemp Consulting

I love about this idea is it would serve as a foundation for incremental change,” Kemp says. “Farmers could improve their performance and be rewarded for it; etha-nol plants could improve their scores. It’s a policy that encourages everyone to im-prove their practices—and not a hammer. And, we’re not picking winners.”

Current biofuels subsidies reward corn ethanol and soy biodiesel for their societal benefi ts, including national energy security, jobs and rural economic development, im-proved air quality and superior life-cycle greenhouse gas (GHG) performance com-pared to gasoline. “Yet actual delivery of those benefi ts has been vigorously debat-ed,” Kemp wrote in her proposal. “What is missing from current tax policy is a re-quirement for actual performance in de-livering expected environment and climate benefi ts.”

The Greener Biofuels Tax Credit pro-posal says it would:

Be technology neutral and apply to all biomass-based fuels and all feedstocks

Be performance based, rewarding better environmental performance with higher tax credit payments

Protect the environment by reward-ing lifecycle carbon emission reductions beyond those required by the RFS

Be streamlined, using workable re-porting systems for farmers, biofuel refi n-ers and the Internal Revenue Service

Be budget neutral, using savings from phasing out current production tax credits to fund the new, greener biofuels tax credit.

Kemp suggests the tax credit be ap-plied to biofuels according to their energy content, with 76,000 Btu—the energy con-tent of one gallon of ethanol—serving as the base. Existing corn ethanol and soy biodiesel producers would be eligible as long as they employ advanced processes, such as using renewable energy and using feedstocks from farmers who are building soil quality and minimizing polluted runoff. Next generation biofuels could earn even more if they vastly reduce GHG emissions and rely on perennial feedstocks that re-quire little land disturbance or fertilization.

One of the biggest hurdles, Kemp admits, will be to convince people that such a system wouldn’t be a bureaucratic nightmare of paperwork. “We’re going to have to show people that the logistics of this aren’t going to be a big headache,” she says. “There is a simple performance tool, third-party verifi cation that takes less than a half hour to complete, and the score would be attached to renewable identifi cation numbers (RINs). All the IRS will need is to get the score for the RINs.”

The half of the tax credit based on carbon performance would be paid in direct proportion to reductions in GHG emissions, based on the EPA’s calcula-tions of lifecycle GHG emissions in the RFS. The refi nery’s choice of feedstocks, technology and management of direct emissions would determine its life-cycle emissions. A zero-carbon biofuel (a 100 percent reduction compared to fossil fuel) would be eligible for the full carbon tax credit of 50 cents per gallon.

The half of the greener tax credit re-warding refi neries that buy more sustain-able feedstocks would potentially reward the farmers growing the biofuel crops. “It is critical that the industry not be motivat-ed solely by the lowest price feedstocks, forcing growers to cut corners and ignore conservation opportunities,” the propos-al says. “A performance-based tax policy would telegraph incentives to minimize tillage, fertilizer and pesticide use, erosion and runoff.” Kemp envisions a system where farmers sit down with Natural Re-source Conservation Service personnel once a year to calculate their performance scores. The biofuel producer would then collect the certifi cates of scores accompa-nying feedstock deliveries, and compute an average. She suggests there be a mini-mum environmental stewardship thresh-old, disallowing such practices as land conversion of intact ecosystems such as forests, wetlands and prairies. One of her recommendations that will no doubt be controversial is that feedstocks produced using irrigation should not qualify. Other eligibility requirements she recommends

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deal with crop residue being removed at sustainable levels and farms meeting USDA Conservation Compliance re-quirements.

Reforming Credits to Save Them

While biofuels producers may dis-miss her proposal as unnecessary change, Kemp suggests it could be a way to re-focus biofuel subsidies, essentially sav-ing them in the face of increasing criti-cism. All the current biofuel tax credits have sunset clauses, she points out, and will be up for debate in the next couple of years. “There’s a lot of feeling that we don’t need these tax credits because they duplicate the RFS.”

While Kemp drafted the winning Farm Foundation policy proposal, she developed the concepts in conversations with Nathanael Greene at the Natural Resources Defense Council and Jeremy Martin with the Union of Concerned Sci-entists. Martin, who is a senior scientist in the clean vehicles group, provided in-put on the GHG reduction sections of the EPA’s rule to implement the second stage of the renewable fuel standard us-ing RINs as the instrument to report to the IRS. The details of how it might work will depend upon how EPA incorporates GHG reduction targets in the implemen-tation of RFS2, he says. “Everyone has

a sense of what we want from our biofuels program, which is to reduce oil use and re-duce GHG emissions,” he adds. “Here’s a pro-posal to reform tax credits and make them work.” Martin cites a U.S. Government Ac-countability Offi ce re-port released in August that found ethanol tax credits are redundant to the RFS. “They don’t

increase the volume of ethanol sold and don’t raise the price of corn,” Martin re-

ports. “[The ethanol tax credits] cost $4 billion a year and they’re not delivering any extra biofuels and not creating extra GHG benefi ts.” Martin also points out the cellulosic ethanol tax credit has prob-lems as well, with the paper industry get-ting tax credits worth millions for black liquor production used to fuel boilers. “No transportation fuel has been created and it’s something they’ve been doing all along, so nothing is new,” he says.

Radically reforming the biofuels tax credit will be no small challenge. Greene has presented the concept to small groups of ethanol industry leaders. The response was polite listening, which Greene consid-ers a pretty open response. “They didn't throw me out,” he says with a chuckle. The overall logic of the proposal was grasped quickly, and the questions zeroed in on the details, he says. “Some of the obvious and important questions are: how will it be implemented and what does it mean economically for all the different players? Is there enough money to encourage and pay for the improved technologies at the biorefi nery and the improved practices in the fi eld that would be needed to get the higher scores?” Greene adds that he’s hoping someone trusted by the industry will examine the Greener Biofuels Tax Credit’s possible impact. “I’m not con-vinced the NRDC would be a credible messenger on that sort of economics study,” he adds. In the meantime, NRDC has begun looking for a Congressional sponsor for a bill.

The timetable is actually very tight, with ethanol tax credits expiring at the end of 2010. One-year extensions have been done in the past and may occur again, with Congress being pressured to complete legislation on health care reform, banking regulation and climate change policies. EP

Susanne Retka Schill is an assistant editor at BBI International. Reach her at [email protected] or (701) 738-4922.

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Nathanael Greenerenewable energy policy director,Natural Resources Defense Council


Sowmya Arra is known around the lab for her soft-spoken and friendly nature, but the

South Dakota State University food science graduate student has big dreams. Arra’s goal is to feed the world through a low-cost yet sustainable means using distillers dried grains (DDGs).

While that may seem like a tall order, Arra is well on the way to reaching her goal after winning the graduate research poster com-petition at the Institute for Food Technologists Conference in Ana-heim, Calif. Competing against 50 other graduate students, Arra won

a $1,000 cash award and certifi cate for her project, “Fortifying Chapa-thies, an Asian Whole Wheat Un-leavened Flat Bread. Using Corn Distillers Dried Grains.”

Since the competition in July, Arra’s research has expanded to include naan—oven-baked, leav-ened fl at bread popular in Af-ghanistan, India and Pakistan and which tastes remarkably like pizza crust.

When choosing her thesis project, Arra, who is from In-dia, said she wanted “to make a product that has all the nutrient values.” She found that in food-grade, DDGs, which contain 40

percent dietary fi ber and 36 per-cent protein.

“Due to economics and their culture, many people make their own bread,” Arra explained. “Since they make fl at bread, it only makes sense to provide a better fl our ingredient, which has higher nutritional qualities.”

Developing food products from DDGs has been a challenge I have faced as Arra’s adviser since I came to SDSU in 1989. The food grade DDG is a product I have been working on at SDSU for the past 20 years and I envi-sion limitless possibilities for the fl our made from DDGs.

One case where bland is best

In order to blend with fl our, the DDG fl our has to be made aroma neutral, taste neutral and texture neutral. What needs to be created is in essence, a stealth ingredient that blends with the background and allows other ingredients to pick up the slack. This ingredient must also work in harmony with the food system.

So far, that food system can handle about 7 percent to 20 per-cent of the DDG fl our in the traditional fl our used in bread products. Adding any more of the DDG fl our, particularly in yeast-

Distillers Dried Grain Yields High-Fiber, High-Protein FlourA fl our made from distillers dried grains used in the fl at bread being baked at the food science lab at South Dakota State University. The fl our could be a solution to global hunger.

The claims and statements made in this article belong exclusively to the author(s) and do not necessarily refl ect the views of Ethanol Producer Magazine or its advertisers. All questions pertaining to this article should be directed to the author(s).

INNOVATION. BY PADMANABAN KRISHNAN

Contribution

Padmanaban Krishnan, Kurt Rosentrater and Sowmya Arra form the team at SDSU studying fl our made from distillers dried grains.

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leavened products, undermines the dough system. By replacing more then 20 percent of wheat fl our with the DDG fl our, one risks baking “hockey pucks” or “bricks,” but fl at breads are a dif-ferent story. Mixed in at the right levels, the DDG fl our will add sig-nifi cantly to the fi ber and protein of tortillas, cookies, noodles and breads.

Next step belongs to industry

A variety of entities have in-vested in the research so far. At one time or another in the pro-cess, that funding has come from the U.S. Agricultural Research Service, the SDSU Agricultural Experiment Station, the South Dakota Wheat Commission and the South Dakota Corn Utiliza-tion Council.

At this point, the team has taken the DDG fl our about as far as it can. The entrepreneur is the one who will have to run with it.

Finding those entrepreneurs in a down economy may prove to be diffi cult. One person who’s on the lookout is Kurt Rosen-

trater, a biomass engineer with the Agricultural Research Service, whose mandate from USDA is to add value to DDGs. Rosentrater has worked collaboratively with SDSU for the past fi ve years.

Closely associated with the research that resulted in Arra’s master’s thesis, Rosentrater said he has fi elded calls from “dozens” of companies that are toying with the idea of pursuing the project. “It’s got to be industry’s invest-ment,” Rosentrater said. “So far, nobody’s been willing to pull the trigger and take that leap.”

Capturing what could be an international market will start fi rst with the U.S. Food and Drug Administration. Rosentrater said that the FDA will need to ensure that the corn is food-grade from the kernel to the fi nished prod-uct. For some ethanol plants, that may mean the installation of new equipment.

Time may be right for DDG fl our

The federal call for a signifi -cant increase in renewable fuels by 2022 will also mean an increase

in the production of DDGs. Ac-cording to Rosentrater, about 80 percent of DDGs is used as feed for beef and dairy animals with the rest going to feed swine and poultry.

“We have not hit a point where we’ve saturated that mar-ket,” Rosentrater said, though he does note some interesting factors that may infl uence the market.

Rosentrater estimates ethanol plants are currently producing be-tween 25 million metric tons and 30 million metric tons of DDGs and the new fuel standards may increase that output to as much as 40 million metric tons.

He said that about 20 per-cent of U.S. DDGs was exported internationally last year. “That’s up considerably,” Rosentrater said. “There are plenty of oppor-tunities if the ethanol plants are interested.”

This work has accomplished much to add value to an under-utilized co-product. The research has always intended to get every-thing out of the corn, including the squeal.

At present, DDGs are sold at 8 to 10 cents per pound, $165 per ton, as livestock feed. Food ingredients are sold at about $2 to $3 per pound. Adding utility in the food industry will enhance DDGs’ economic return to the producer.

We have demonstrated sci-entifi c, nutritional and technical merit, but we realize that it is the economic drivers that will permit food-grade DDGs to take wing. The world is hungry for novel protein, fi ber and functional in-gredients if the $21.8 billion nu-traceutical ingredients market is any indication.

Far from just a “byproduct” of the ethanol-making process, DDG can account for 20 percent to 40 percent of an ethanol plant’s income. Adding value to the dried distillers grain makes business sense while at the same time help-ing to alleviate world hunger. EP

Padmanaban (Padu) Krishnan is a food scientist South Da-kota State University. Reach him at [email protected].

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56 ETHANOL PRODUCER MAGAZINE January 2010

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FLAMEX Inc.336-299-2933 fl [email protected]

Fractionation-Corn

Cereal Process Technologies217-779-2595 www.cerealprocess.com

Crown Iron Works651-639-8900 www.crowniron.com


MOR Technology, LLC618-522-8324 www.mortechnology.com

Grain Handling & Storage


McC, Inc.763-477-4774 www.mccormickconstruction.com

Instrumentation


Insulator

Miller Insulation Co., INC701-297-8813 www.millerinsulation.com

Laboratory-Equipment


Loading Equipment

Carbis, Inc.800-845-2387 www.carbis.net

Alaqua Inc.Evaporators, Crystallizers, Distillation, Columns, Solvent

Recovery, Heat-Exchangers, Process Engineering

7004 Boulevard East, Ste.28A Guttenberg, NJ 07093 USATel: 201.758.1577 Fax: 201.758.1522

[email protected]

www.alaquainc.com


EPM MARKETPLACE

Maintenance Software


Millwright


Moisture Analyzers


Molecular Sieves


Parts & Services


Process Control

VFTechnical Services, LLC423-794-6747 www.vftechserv.com

Pumps

PeopleFlo Manufacturing847-929-4774 www.peoplefl o.com

Valley Equipment Co. Inc.423-753-3541 www.valleyequipment.com

QA Test Products


Scales-Truck

Weigh-Tec Inc.1-800-461-4153 www.truck-scales.com

Structural Fabrication


Tanks


Thermal Oxidizers

Pro-Environmental, Inc.909-989-3010 www.pro-env.com

Valves

Check-All Valve Mfg. Co.515-224-2301 www.checkall.com

Wastewater Treatment Services



UEM, Inc.561-385-7515 www.uemgroup.com

Yield Enhancement

EdneiQ, Inc.310-592-4158 www.EdeniQ.com

FinanceAppraisals

Natwick Associates Appraisal Services800-279-4757 www.natwick.com

Insurance

ERI Solutions, Inc.316-927-4294 erisolutions.com

Mergers & Acquisitions

Moglia Advisors847-884-8282 www.mogliaadvisors.com

Legal ServicesAttorneys

BrownWinick Law Firm515-242-2400 www.biofuellawyers.com

MarketingFuel Ethanol

CHS Renewable Fuels651-355-6271 www.chsinc.com

Miscellaneous

Maas Companies507-424-2640 www.maascompanies.com

Nelson Ink Promotional Products218-222-3831 www.nelsonink.com

Research & DevelopmentDynamometer Testing

Roush Industries734-779-7736 www.roush.com

TransportationRail

Ameritrack RailRoad Contractors, Inc.765-659-2111 www.ameritrackrailroad.com

Railcar Parts

Salco Products, Inc.630-783-2570 www.salcoproducts.com

EPM MARKETPLACE

With all contact information placed

in one convenient location, Ethanol

Producer Magazine not only con-

tains top editorial content but also

a useful directory in each publica-

tion. Whether a fi rst-time adver-

tiser wanting to raise awareness

of your business or a frequent dis-

play advertiser looking for added

exposure, EPM Marketplace is the

perfect solution.

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EPM MARKETPLACE

WE ARE GROWTH ENERGY.YOU ARE, TOO.

Growth Energy means business. We’ve taken a forceful stand on the food industry’s “food vs. fuel” smear

campaign. Now we’ve set our sights on a bigger goal: raising the regulatory cap on ethanol. This work

won’t be easy. But together, we can grow our industry to where it needs to be, helping our nation become

energy independent while creating jobs at home and a cleaner environment for future generations.

Ethanol is clean, green, high-tech and homegrown. Help spread this word to opinion leaders, policy makers

and Americans from coast to coast. Go to GrowthEnergy.org today and see how you can get involved.

Together, we can keep ethanol growing.

WE’RE A GROUP OF LEADING ETHANOL COMPANIES DEDICATED TO FUELING

AND FEEDING THE WORLD THROUGH ETHANOL AND AGRICULTURE.

GrowthEnergy.org

Growth Energy means business. We led the ght against the food industry’s “food vs. fuel” smear

campaign. And we are leading the effort to raise the regulatory cap on ethanol. It is not easy work. But

together, we can grow our industry, help our nation become energy independent and create jobs while

cleaning the environment for our children and grandchildren.

Ethanol is clean, green, high-tech and homegrown. Help spread this word to opinion leaders, policy

makers and Americans from coast to coast. Go to GrowthEnergy.org today and see how you can get

involved. Together, we can keep ethanol growing.

january 2010 ethanol producer magazine

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