Ethanol May 2014

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  • www.EthanolProducer.com

    MAY 2014MAY 2014

    INSIDE: FEW CELEBRATES 30 YEARS OF EXCELLENCE

    Separation Know-How

    Technology Ramps Up Corn Oil, Ethanol Yield

    Page 28

    PlusMarket Growth

    Apace With Demand Page 34

    Chemicals, EnzymesBoost Extraction Rates

    Page 54

    Co-location Reality Page 60

  • BROUGHT TO YOU BY GROWTH ENERGY.

    From advocating for ethanol on Capitol Hill, to

    validating higher ethanol blends through NASCAR, to

    calling out Big Oil with a national television campaign,

    Growth Energy is there for the producers and

    supporters of the ethanol industry.

    We know were in a battle, but were ready for the fight.

    Learn more at GrowthEnergy.org

    Austin Dillon and Austin Dillons autograph are trademarks of Austin Dillon. All trademarks and the likeness of the No. 39 racecar are used under license from their owners. NASCARh is a registered trademark of the National Association of Stock Car Auto Racing, Inc.

  • 1815 SATELLITE BLVD., BLDG. 200 DULUTH, GA 30097 678-474-4590 678-474-4595 FAX www.lallemandbds.com2014 LALLEMAND BIOFUELS & DISTILLED SPIRITS.

    We bring ethanol production into better focus.

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  • 4 | Ethanol Producer Magazine | MAY 2014

    MAY 2014 VOLUME 20 ISSUE 5CONTENTS

    DEPARTMENTS

    6 EDITOR'S NOTE Reinvesting in Change

    By Tom Bryan

    7 AD INDEX

    10 THE WAY I SEE IT Lies, Repeated Often Enough,

    Become Fact By Mike Bryan

    11 EVENTS CALENDAR

    12 VIEW FROM THE HILLNew Horizons

    By Bob Dinneen

    14 DRIVEServing Those Who Serve

    By retired Army Gen. Wesley K. Clark

    16 GRASSROOTS VOICE Naturally Driven to Innovate

    By Brian Jennings

    18 EUROPE CALLING A Remarkable and Crucial Year

    By Robert Vierhout

    20 BUSINESS BRIEFS

    22 COMMODITIES

    24 DISTILLED

    44 BUSINESS MATTERS OSHA Alive and Well

    With Budget Increase By Alexander F. Logemann

    46 MARKETPLACE

    66 TALKING POINT Prepare Now for Summers

    Upcoming Flowability Challenges By Kurt A. Rosentrater

    Ethanol Producer Magazine: (USPS No. 023-974) May 2014, Vol. 20, Issue 5. Ethanol Producer Magazine is published monthly by BBI International. Principal Office: 308 Second Ave. N., Suite 304, Grand Forks, ND 58203. Periodicals Postage Paid at Grand Forks, North Dakota and additional mailing offices. POSTMASTER: Send address changes to Ethanol Producer Magazine/Subscriptions, 308 Second Ave. N., Suite 304, Grand Forks, North Dakota 58203.

    TECHNOLOGY Beyond Corn Oil Extraction New technology separates multiple coproducts By Holly Jessen

    UTILIZATION Ready Markets Soak Up Corn Oil Demand increases for biodiesel, feed and exports By Chris Hanson

    EVENT Three Decades StrongA look back at FEW before the 30th anniversary event in June By Tom Bryan

    ADDITIVES Optimizing For More Oil Chemicals and enzymes ratchet up yield By Susanne Retka Schill

    28 34

    40 54

    FEATURES

    ON THE COVER

    The VFrac development team stands in the companys Dexter, Mich., facility.

    PHOTO: BOB FORAN PHOTOGRAPHY

    CO-LOCATION Biodiesel: Coming Soon to an Ethanol Plant Near You Companies move forward on construction projects By Ron Kotrba

    60

    CONTRIBUTIONSCARBON Lowered Drying Costs From Corn Oil Removal Impact Carbon Accounting CARB no longer accepts default values, since parameters vary widely By James M. Ramm

    64

  • Registered trademark, Ashland or its subsidiaries, registered in various countries Trademark, Ashland or its subsidiaries, registered in various countries* Trademark owned by a third party 2012, AshlandAD-11650

    Each day oers the opportunity to transform the potential of your ethanol plant. Reinvent your performance and growth potential with our advanced chemistries, unique application insights and practical expertise. Together, we will transform multiple parts of your operationboost corn oil yields, drive production eciencies and nd inventive new ways to cut costs. Discover the full potential of your plant today.

    See how good chemistry can work for you at ashland.com/ethanol

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  • 6 | Ethanol Producer Magazine | MAY 2014

    FOR INDUSTRY NEWS: WWW.ETHANOLPRODUCER.COM OR FOLLOW US: TWITTER.COM/ETHANOLMAGAZINE

    This June, our industrys mainstay summer conference turns 30. Were excited about this milestone, and for fun, weve loaded 12 pages with photos of some memorable moments at the International Fuel Ethanol Workshop & Expo. Join our walk down memory lane, starting on page 40, with more than three dozen pictures of the people, places, awards and presentations that longtime FEW attendees will surely recognize.

    The 30th annual FEW agenda is now fi nalized and online. You might think that, after

    three decades, it would become diffi cult to fi nd new ways to continue Linking Industry

    with Innovation, but just the opposite is true. The FEWs strong 2014 agenda, like each issue of this magazine, reminds us that our industry is in a state of constant change and discovery.

    The focus of this issue, corn oil, is a virtual study in our industrys predilection for progress. Its not that corn oil extraction itself is new90 percent of Americas ethanol plants are doing itbut the way it is still unfolding is fascinating. This issue looks closely at how new progressions of mechanical extraction technology, along with the aid of chemicals and enzymes, are allowing producers to develop tailored solutions to optimize oil production and recover the product inside of exacting parameters.

    In our page-28 cover story, Beyond Corn Oil Extraction, we learn that not only

    is oil recovery still advancing, but Valicor Separation Technologies LLC is doing so in a

    way that is in harmony with existing plant technology and forward compatible with the

    next-generation biofuels ambitions of so many of todays producers. The importance of fi ne-tuning corn oil extraction comes up in our cover story and

    again in our page-54 feature, Optimizing for More Corn Oil. Senior Editor Susanne

    Retka Schill examines our industrys enterprising use of chemicals to improve oil recovery and maximize the payback on mechanical extraction systems. In addition to chemical enhancement, Retka Schill reports that a number of producers are now using an enzymatic approach to enhance oil yields, with impressive results.

    As extraction techniques are optimized, its good to know the marketplace for corn oil is strong. Staff Writer Chris Hanson reports in Ready Markets Soak Up Corn Oil, on

    page 34, that corn oil from ethanol plants is now the No. 2 U.S. feedstock, behind soybean

    oil, for biodiesel production. Not all ethanol plants, however, are content selling corn oil; some are incorporating biodiesel production on site. In our page-60 feature, Biodiesel:

    Coming Soon to an Ethanol Plant Near You, Biodiesel Magazines Ron Kotrba catches up with two Illinois ethanol plants that are making corn-oil-to-biodiesel happen.

    After 30 years, its simply amazing to see Americas ethanol plants still reinvesting in change. See you at the FEW.

    EDITOR'S NOTE

    Reinvesting in Change

    Tom BryanPresident & Editor in [email protected]

  • MAY 2014 | Ethanol Producer Magazine | 7

    FOR INDUSTRY NEWS: WWW.ETHANOLPRODUCER.COM OR FOLLOW US: TWITTER.COM/ETHANOLMAGAZINE TM

    EDITORIALPresident & Editor in Chief

    Tom Bryan [email protected] President of Content & Executive Editor

    Tim Portz [email protected] Editor

    Holly Jessen [email protected] Senior Editior

    Susanne Retka Schill [email protected] Editor

    Erin Voegele [email protected]

    Staff WriterChris Hanson [email protected]

    Copy EditorJan Tellmann [email protected]

    ARTArt Director

    Jaci Satterlund [email protected] Designer

    Raquel Boushee [email protected]

    PUBLISHINGChairman

    Mike Bryan [email protected]

    Joe Bryan [email protected]

    SALES

    Vice President of OperationsMatthew Spoor [email protected]

    Business Development DirectorHoward Brockhouse [email protected]

    Senior Account ManagerChip Shereck [email protected]

    Marketing DirectorJohn Nelson [email protected]

    Circulation ManagerJessica Beaudry [email protected]

    Traffic & Marketing CoordinatorMarla DeFoe [email protected]

    Customer Service Please call 1-866-746-8385 or email us at [email protected]. Subscriptions to Ethanol Producer Magazine are free of charge to everyone with the exception of a shipping and handling charge of $49.95 for any country outside the United States, Canada and Mexico. To subscribe, visit www.EthanolProducer.com or you can send your mailing address and payment (checks made out to BBI International) to: Ethanol Producer Magazine Subscriptions, 308 Second Ave. N., Suite 304, Grand Forks, ND 58203. You can also fax a subscription form to 701-746-5367. Back Issues, Reprints and Permissions Select back issues are available for $3.95 each, plus shipping. Article reprints are also available for a fee. For more information, contact us at 866-746-8385 or [email protected]. Advertising Ethanol Producer Magazine provides a specific topic delivered to a highly targeted audience. We are committed to editorial excellence and high-quality print production. To find out more about Ethanol Producer Magazine advertising opportunities, please contact us at 866-746-8385 or [email protected]. Letters to the Editor We welcome letters to the editor. Send to Ethanol Producer Magazine Letters to the Editor, 308 2nd Ave. N., Suite 304, Grand Forks, ND 58203 or email to [email protected]. Please include your name, address and phone number. Letters may be edited for clarity and/or space.

    COPYRIGHT 2014 by BBI InternationalPlease recycle this magazine and remove inserts or samples before recycling

    VOLUME 20 ISSUE 4

    ADVERTISER INDEX

    AOCS American Oil Chemists 25Ashland Water Technologies 52014 Fuel Ethanol Workshop & Expo 692014 National Advanced Biofuels Conference 32BBI Project Development 9BetaTec Hop Products 19Buckman 24Cloud/Sellers Cleaning Systems 63DuPont Industrial Biosciences 72Fagen Inc. 15Fluid Quip Process Technologies, LLC 8Foundation Analytical Labratory 26Gamajet Cleaning Systems, Inc. 49Greenbelt Resources Corporation 31GreenShift Corporation 21Growth Energy 2Hydrite Chemical Co. 53Hydro-Klean LLC 20ICM, Inc. 11INTL FCStone Inc. 58Iowa Economic Development Authority 67Jatrodiesel, Inc. 56Lakos Separators and Filteration 51Lallemand Biofuels & Distilled Spirits 3Magnetec Inspection, Inc. 62Mist Chemical & Supply Company 50Nalco, an Ecolab Company 38Natwick Associates Appraisal 37Novozymes 57Phibro Ethanol Performance Group 71POET-DSM Advanced Biofuels 13RPMG, Inc. 39Syngenta: Enogen 17Tower Performance, Inc. 47Valicor Separation Technologies 33Verenium 52Victory Energy Operations, LLC 43Vogelbusch USA, Inc 65Wabash Power Equipment 45WB Services, LLC 36West Salem Machinery 59WINBCO 27

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  • 10 | Ethanol Producer Magazine | MAY 2014

    The U.S. ethanol industry is energized (rightly so) by the uptick in the ethanol export market. At the same time, it is unfortunate that we rejoice over a growing export market when we consume 130 billion gallons of gasoline annually in America. The question that needs to be asked is why would we have to export anything when ethanol is such a small percentage of the total market?

    Ethanol is restricted to a 10 percent blend level, in many cases, while battling tooth and nail to achieve a 15 percent blend over strong opposition, when other countries like Brazil

    utilize much higher blends, trouble free. Its not a technical issue, its a political issue and even the politicians who side with the oil industry know its not a technical issue.

    There has been ample fodder for the anti-ethanol folks, food vs. fuel, deforestation, land use, consumer concerns, drivability and more, all generously provided by the oil industry under the cover of independent research, humanitarian concern and consumer protection. These are fabricated tales of the highest order, yet for those who want to see the demise of the ethanol industry, its all the information they need to wage war on ethanol and agriculture in general. There is no need to concern oneself with the facts, you can easily ignore the truth and hide from reality, because you have have been well-armed with tales of woe to help make your case on behalf of the oil industry. As the saying goes, Lies repeated often

    enough become fact.Whether its food, ethanol, plastics or pharmaceuticals,

    American agriculture has a leg up on oil. Professor Thomas

    Johnson of the University of Missouri has co-authored a

    paper on the benefits to rural economies of a robust bioenergy

    industry. This includes not only biofuels but a range of bio-manufactured products. The rural economy of America is poised for great things and biofuels are just tip of the iceberg.

    Its time that agriculture assumes its rightful place in the economic future of America. Not just as a provider of food, but as an environmentally responsible provider of a wide range of products that are now often petroleum-based. We have to move away from the idea that crops can only be used to feed people, we need to abandon the fear of genetically modified crops that can significantly improve yields and shed

    the shackles that have bound us to the antiquated belief that if you use crops for anything other than feeding people, its somehow a sin against humanity.

    Agriculture provides a pathway to a bright, domestic and economically sound future. When the oil wells today are nothing more than rusted relics of the past, American farmers will still be producing an exciting array of renewable and environmentally responsible products, while helping feed the world.

    Thats the way I see it!

    Lies, Repeated Often Enough, Become FactBy Mike Bryan

    Author: Mike BryanChairman, BBI International

    [email protected]

    THE WAY I SEE IT

  • International Fuel Ethanol Workshop & ExpoJune 9-12, 2014Indiana Convention CenterIndianapolis, IndianaNow in its 30th year, the FEW provides the global ethanol industry with cutting-edge content and unparalleled networking opportunities in a dynamic business-to-business environment. The FEW is the largest, longest running ethanol conference in the worldand the only event powered by Ethanol Producer Magazine.866-746-8385 | www.fuelethanolworkshop.com

    National Advanced Biofuels Conference & ExpoOctober 13-15, 2014Hyatt MinneapolisMinneapolis, MinnesotaProduced by BBI International, this event will feature the world of advanced biofuels and biobased chemicalstechnology scale-up, project finance, policy, national markets and morewith a core focus on the industrial, petroleum and agribusiness alliances defining the national advanced biofuels industry. With a vertically integrated program and audience, this event is tailored for industry professionals engaged in producing, developing and deploying advanced biofuels, biobased platform chemicals, polymers and other renewable molecules that have the potential to meet or exceed the performance of petroleum-derived products.866-746-8385 | www.advancedbiofuelsconference.com

    National Ethanol ConferenceFebruary 18-20, 2015Gaylord Texan Resort &Convention CenterGrapevine, TexasThe NEC provides attendees with timely information on critical regulatory, marketing and policy issues facing the ethanol industry. Experts will speak to the current market situation, and address how we as an industry can continue to grow through innovation, new technologies and feedstocks, and by developing more diverse and global markets.

    International Biomass Conference & ExpoApril 20-22, 2015Minneapolis Convention Center, Minneapolis, MinnesotaOrganized by BBI International and produced by Biomass Magazine, this event brings current and future producers of bioenergy and biobased products together with waste generators, energy crop growers, municipal leaders, utility executives, technology providers, equipment manufacturers, project developers, investors and policy makers. Its a true one-stop shopthe worlds premier educational and networking junction for all biomass industries. 866-746-8385 | www.biomassconference.com

    EVENTS CALENDAR

  • 12 | Ethanol Producer Magazine | MAY 2014

    As President Obama and the U.S. EPA deliberate what to do with the renewable fuel standard, the U.S. ethanol industry understands that no matter what happens with that program, we will still need to build demand to assure continued growth and stability. Increasingly, that new demand is coming from beyond our shores.

    Last year, the United States exported 621.5 million gallons

    of ethanol to countries both large and small and from every corner of the globe. Canada, the Philippines, Brazil, Mexico

    and the United Arab Emirates represent just a handful of the

    different markets U.S. producers sent product in 2013. Clearly,

    the demand for high-octane, low-carbon ethanol knows no border. U.S.-produced ethanol is now the lowest-cost liquid

    transportation fuel on the planet. Any nation desiring to give their consumers some relief at the pump knows they need our fuel.

    The Renewable Fuels Association is at the forefront of the effort to expand ethanol markets abroad. Last October, the

    RFA led a trip to northern Brazil through the U.S. Department

    of Commerce and the Brazil-U.S. Business Council, setting up

    matchmaking sessions to connect U.S. ethanol producers with

    businesses looking to import the low-cost fuel. That trip alone led to $20 million in ethanol sales, with another $9 million in

    the works. That was a resoundingly successful venture and additional trips are being planned as we look to expand exports into Asia.

    We will continue to push forward into new markets. The RFA has created an Export Enhancement program with Growth Energy and the U.S. Grains Council. We are

    committed to seizing upon new market opportunities. This is only the beginning.

    New Horizons By Bob Dinneen

    Author: Bob DinneenPresident and CEO,

    Renewable Fuels Association202-289-3835

    VIEW FROM THE HILL

  • 14 | Ethanol Producer Magazine | MAY 2014

    Serving Those Who ServeBy retired Army Gen. Wesley K. Clark

    We often talk about National Security in broad terms. We discuss the financial implications of relying on foreign oil, or the economic risks of importing our energy, but we often overlook the greatest national interestour service members. When we focus on our national security, we often forget that our sons, daughters, brothers and sisters are the ones who are directly responsible for carrying out the task of preserving and protecting our freedoms. Regardless of political views or opinions, we can agree that the selfless actions of our soldiers, sailors, airmen, Marines and Coast Guardsmen throughout the recent conflicts deserve our honor and respect.

    As Memorial Day approaches, I wanted to focus on what Growth Energy members have done to support our service members and veterans. Last year, Growth Energy launched the Fueling Our Forces program, which raised more than $100,000 through our membership, for the Armed Forces Foundation. This year, we are on track to far exceed that amount.

    The AFF is dedicated to supporting active-duty military personnel, National Guardsmen, Reservists, military families and veterans. Since 2001, the AFF has provided more than $75 million in assistance by covering travel, hotel rooms, home mortgages, car payments and everyday bills to enable families to stay at the side of their loved ones sides during treatment and recovery from wounds suffered during war.

    With the launch of the Help Save Our Troops campaign, the AFF proactively educates Americans about the hidden wounds of war, including post-traumatic stress disorder and traumatic brain injury, and advocates for those troops and veterans who have suffered these hidden wounds. The ultimate goal of Help Save Our Troops is to reduce military suicides.

    Growth Energy is truly dedicated to those who defend us, but we also seek to minimize the need for them to deploy abroad. By reducing the need for foreign energy, we reduce the potential for future conflicts in tremulous regions to protect petroleum imports. Our members work tirelessly to produce a domestic fuel that not only strengthens our energy independence, but also develops jobs and preserves our environment.

    Biofuels are essential to the future energy security of our nation. They strengthen our economy, create jobs that cannot be outsourced and revitalize our rural communities throughout the nation. We cannot continue to use our military forces for the protection of foreign oil imports. The current system simply is not sustainable and costs our nation billions each year by exporting our money to foreign oil magnates who artificially manipulate the cost of their product. We, as a nation, then ask our military men and women to protect the shipping lanes for that oil, through treacherous regions, costing us millions more in blood and treasure.

    We cannot afford to continue importing foreign oil. We cannot afford to divert our essential national security assets, purely for energy security. By continuing to promote and validate ethanol as a viable alternative to our oil addiction, we help protect our nation and reduce the potential danger for our fighting men and women. I invite you to continue your support of our servicemen and women and to keep fighting for our nations energy future.

    Author: retired Army Gen. Wesley ClarkCo-chair of the Growth Energy Board of Directors

    [email protected]

    DRIVE

  • 16 | Ethanol Producer Magazine | MAY 2014

    Naturally Driven to Innovate By Brian Jennings

    President Eisenhower didnt know how right he was when he said Farming looks mighty easy when your plow is a pencil and youre a thousand miles from a corn fi eld. Today, thanks in large part to ethanol, plows and pencils have been replaced by no-till and precision agriculture.

    The unrivaled speed of technology adoption in agriculture and biofuels is just another benefi t of the renewable fuel standard (RFS). More than any policy enacted by Congress, the RFS has spurred the production of corn, ethanol and ethanol coproducts more effi ciently and with less environmental impact. While oil is becoming more diffi cult to fi nd, expensive to drill and harmful to the environment, ethanol is becoming more sustainable, effi cient and cleaner.

    Today, farmers apply fewer inputs to produce larger crops on the same land. In 2013, they produced nearly 160 bushels of corn per acre, twice as much corn per acre of land than when the fi rst cell phones were introduced in the 1980s. A recent University of Illinois-Chicago study found that as corn farmers and ethanol producers continue to innovate, ethanol results in 60 percent fewer greenhouse gas (GHG) emissions than gasoline, and, state-of-the-art technology has improved ethanols energy balance to a more than 2 to 1 ratio.

    Meanwhile, the days of easy oil are over. Finding oil compressed-tightly within rocks and far below the land or sea is more energy-intensive than ever before.

    As ethanol has helped restore profi tability to agricultural production, farmers can afford to adopt new technologies and practices to conserve water and soil and produce more bushels of grain using fewer inputs. According to a survey by Purdue University, the use of auto-steer for fertilizer application has increased 11 percent and auto-steer is now in use on nearly two-thirds of farms. Precision agriculture and GPS auto-steer technology have saved North Dakotas farmers nearly 12 percent of fuel costs, according to North Dakota State University.

    Biotech crops have also played a role in helping farmers become more effi cient. According to the USDA, about half the total land used to grow crops (169 million acres) in the U.S. was

    planted to biotech varieties in 2013. These biotech crop traits have saved farmers time, reduced insecticide use and enabled the use of less toxic herbicides. In 2013, more than 18 million farmers in 27 countries planted biotech crops, with adoption rates increasing more than a hundredfold since 1996. For the fi rst time in 2013, 123,500 acres of drought-tolerant corn was planted and more drought-tolerant crop varieties are in the pipeline. Ask seed companies and farmers and theyd tell you none of this progress was possible without ethanol.

    Farm families home place is also their workplace. They drink the water and eat the food from their own land. In order to fulfi ll the hope and dream of virtually every farmer that the next generation succeed them on the home place, the fi rst priority is to leave the farm in better condition than when the last generation passed it on.

    Before 1940, the organic matter contained in crop residues was often mistakenly considered problematic, and efforts to rid fi elds of this organic matter were called trash management. Today, however, thanks to better research and conservation practices such as no-till, scientists and farmers know that crop residues, such as corn stalks leftover from harvest, increase the amount of organic matter and contribute to the overall health of soil. Modern-day farmers understand that organic matter is the lifeblood of soil and scientists now consider the content of soil organic matter as the most important measure of productivity. Soil with large stocks of organic matter absorb and hold more water and crop nutrients, resist erosion and grow higher yields using less fertilizer. There is strong emerging evidence that farmers who utilize no-till to plant corn are able to increase soil health and even sequester carbon by leaving crop residue on their fi elds. In fact, soil test databases show that increases in organic matter in corn fi elds can reduce corn ethanols GHG footprint by 60 percent or more compared to gasoline.

    Farmers and ethanol producers will continue making these important improvements as long as federal policy doesnt punish those of us who are naturally-driven to innovate. This is just another reason why we need to keep the RFS intact.

    Author: Brian JenningsExecutive Vice President

    American Coalition for Ethanol605-334-3381

    [email protected]

    GRASSROOTS VOICE

  • Enogen corn trait technology is bio-engineered to improve ethanol plant efciency and generate more ethanol per bushel of corn. It does this by drastically lowering both slurry and liquefaction viscosity, increasing the ability to load more solids.This provides the opportunity to maximize ethanol throughput and yield while reducing production costs by up to 10%1. Join the next revolution in ethanol production, call 877-4ENOGEN.

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  • 18 | Ethanol Producer Magazine | MAY 2014

    A Remarkable and Crucial YearBy Robert Vierhout

    There are signs that the European Union this year will see an increase in fuel ethanol production that outpaces the growth we have had the previous three years. The expectation is that we will see around a 7 percent increase in output. Its still modest compared to the timeframe 2007 to 2010 when we had double-digit growth numbers.

    It not necessarily a sign of getting back to the double-digit growth era but it is encouraging that under very diffi cult market and political circumstances industry output for this year might be above the average of the past three years.

    Market circumstances are indeed diffi cult this year even though imports are lower and grain prices have come down considerably compared to previous years. There are basically two reasons for making it a diffi cult market. First, EU member states are slowing down the pace with which they increase the blending rate of biofuels. That is disappointing. Also, due to a number of reasons, gasoline consumption is decreasing. Less gasoline consumption means, in most cases, less ethanol consumption than expected.

    The lower level of imports and relative low grain prices may play to our benefi t but the market remains oversupplied. Even though my good friend Bob Dinneen, president and CEO of the Renewable Fuels Association, claims that Europe needs imports to be able to comply with demand, he seems to forget that the EU has around 7.5 billion liters of installed production capacity for fuel use. Demand is not even reaching 5 billion.

    The oversupply situation has caused prices to come down for about the past year. Recently, the spread between the supply of T1 (imported, duty not yet paid) and T2 (imported/domestic, duty paid) became positive for the fi rst time ever. Some European producers are now also exporting but others had to shut down some of their production lines. All in all, a rather mixed picture but a remarkable one.

    2014 will also be a crucial year both at political and policy level. This month European elections for a new Parliament will result in an important shift in political powers. The expectation is that an

    infl ux of more nationalistic minded politicians could undermine the agenda of renewables.

    In the second half of this year, the European Parliament will appoint a new European Commission. This new commission will propose a major set of bills that will determine the energy and climate policy for the 2020s decade.

    The challenges for the industry are substantial, considering that the European Commission in force has already put plans on the table for how the post-2020s policy should look. These plans are not to our liking, as I already indicated two months ago. Even though the Commission proposes a renewable energy target of 27 percent by 2030, it has moved away from continuing a policy that has worked well in the past four years.

    It is crucial that the industry succeed in convincing the new Parliament and the new Commission that no continuation of a renewable energy target for transport means more greenhouse gas emissions in the transport sector, no real investment and production of cellulosic ethanol and a missed opportunity to create more jobs, especially missed opportunities in the rural sector.

    Finding new biofuel champions is what we need to do. And we had better fi nd these champions sooner than later. Part of that exercise is a carefully orchestrated information campaign that needs to underline all the benefi ts of ethanol and will deal, once and for all, with all the myths that have been created around our industry.

    The biggest challenge, however, is fi nding closure on the indirect land use change saga. If we are unable to do so, the European Commission, many members of the European Parliament as well as several nongovernmental stakeholders will keep pushing for ending support for biofuel use after 2020.

    2014 could well turn out to become the year that determines the long-term future of biofuels in Europe.

    Author: Robert VierhoutSecretary-general, ePURE

    [email protected]

    EUROPE CALLING

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  • Chad Campbell was recently pro-moted to plant manager of Aventine Re-newable Energy Inc.s plants in Aurora, Neb. He will be responsible for overseeing future operations, including repair and maintenance of the 45 MMgy Nebraska Energy LLC plant and the 108 MMgy Aventine Aurora West Delta-T plant. Campbell has eight years of experience in the biofuels industry. Aventine also recent-ly promoted Chandi Earnest as director of quality control for the companys 165 MMgy wet mill and dry mill plants in Pe-kin, Ill. Earnest joined Aventine in 2008 as a fermentation specialist and lab man-ager at the Mt. Vernon, Ind., facility. She previously worked for Lallemand Inc. as a technical sales representative.

    e National Corn Growers

    Association has an-nounced that Rick Tolman will step down as CEO of the NCGA at the end of September. He has been with the organization for 14 years, and has spent 37 years working in agriculture. e NCGA is expected to announce members of a CEO search committee soon.

    Valero Energy Corp. has announced that Bill Klesse will step down as the companys CEO, ef-fective May 1. He will remain a Valero director and chair-man of the board. Joe Gorder, who was named Valeros presi-

    dent and chief operating ocer in 2012, will take on the role of CEO. He has also been elected a director by the board of directors and will join the board immedi-ately. Klesse spent his entire 45-year career

    with Valero and its predecessor companies. Gorder has been with Valero and its pre-decessors for 27 years. e company also recently announced that Gene Edwards, its executive vice president and chief de-velopment ocer, will retire eective April 30. Edwards began his career with Valero in 1982.

    e American Coalition for Ethanol has elected its 2014 board ocers. Ron Alverson, founding chairman and current board member of Da-kota Ethanol was re-elected president of the ACE board of directors. Duane Kristensen,

    BUSINESS BRIEFS People, Partnerships & Deals

    TolmanCampbell Earnest

    Klesse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

  • MAY 2014 | Ethanol Producer Magazine | 21

    general manager of Chief Ethanol Fuels, was elected vice president of the board. Dave Sov-ereign of Golden Grain Energy was elected secretary.

    Archer Daniels Midland Co. has pro-moted Juan Luciano to president. He is the 12th person to serve as president in the companys 112- his-tory, and assumes the role in addition to his position as chief oper-ating ocer. Luciano oversees the commer-cial and production activities of ADMs corn, oilseeds and agricultural services businesses, as well as its research, project management and risk management functions. He will continue to report to ADM Chairman and CEO Patricia Woertz. Luciano joined ADM in 2011 after spending 25 years at e Dow Chemical Co., where he most recently served as executive vice president and president of the performance division.

    Arisdyne Sys-tems Inc. has add three new members to its team to prepare the company for new installations, service the existing customer base and continue to build its reputation as a leading technology

    provider in the eld of ethanol and oil en-hancement with its proprietary Controlled Flow Cavitation technology. e new team members include Nick Berchtold, chief nancial ocer; Andrea Wearsch, market-ing and business development associate; and James Wolfe, eld service engineer.

    Greg Krissek was recently appoint-ed CEO of the Kan-sas Corn Growers Association, Kansas Corn Commission and Kansas Grain Sorghum Produc-ers Association. He has nearly 25 years of experience in ag-riculture, ethanol,

    renewable energy and public policy. Krissek previously served as assistant secretary at the Kansas Department of Agriculture, director of operations at Kansas Corn and Kansas Grain Sorghum, director of government af-fairs at ICM Inc. and manager of Kennedy and Coe LLC. He replaces Jere White, who announced his retirement in February.

    Southwest Iowa Renewable Energy has joined the Renewable Fuels Association. e company operates a 120 MMgy ethanol plant in Council Blus, Iowa. In addition to etha-nol, the facility produces more than 330,000 tons of dried distillers grains annually. SIRE also produces corn oil coproduct. e compa-ny was formed in 2005 and began commercial production in early 2009.

    Krissek

    Luciano

    Wearsch

    Berchtold Wolfe

  • 22 | Ethanol Producer Magazine | MAY 2014

    March 21 The coldest winter in the past 10 years bundled a host of factors that lifted regional spot prices to unheard-of levels in the shale era. Spot prices spiked above $40 on three separate occa-sions at Ventura and the price differential between the monthly New York Mercantile Exchange settlement at Henry Hub in Louisiana and the regional Ventura monthly index widened from a discount of 8 cents in December to a premium of $5.64. Understanding the dynamics wreaking havoc on regional prices can help natural gas con-sumers assess the risk of a repeat performance in the next winter.

    The key underlying factor driving the regional premiums was weather related demand. Storage inventories were drawn down rap-idly from December through March. With less gas in storage avail-able to meet peak demand days, pipelines relied more heavily on gas transported from producing areas of the country. This asymmetry between supply available at the field and pipeline transportation ca-pacity limits was crucial to driving the differential between market and field pricing hubs to painful levels for many natural gas consum-ers.

    A number of logistical issues created further complications. In late January, a significant source of supply for the midwest market was interrupted, when Transcanadas Emerson natural gas lateral

    experienced an explosion, completely cutting off supply to Viking pipeline. A second natural gas pipeline experienced challenges in pro-viding sufficient compression to move gas up from the Southwest and the Gulf Coast throughout the month of February.

    Natural Gas Report

    Corn Report

    March 21 March was a strong month for the corn market with May futures trading to the $5.02 level. With that type of price action the producer was actively rewarding the market allowing basis levels to relax.

    Support was steady and gradually led by potential global turmoil in Eastern Europe and by global demand. The Ukraine will be sec-ond or third largest exporter of corn this year. Last year, Ukraine was fourth behind the U.S., Brazil, and Argentina. It has exported a record amount thus far and is expected to export an additional 158 million bushels of corn and 92 million bushels of wheat. There hasnt been failure to meet export obligations to date but traders have definitely added a risk premium to the grain markets in case the situation es-calates.

    U.S. corn export sales continue to outpace the USDA projec-tion leading to the increase for the marketing year. Export sales are projected at 1.625 billion bushels compared to 731 million bushels last year. Corn for ethanol demand has remained steady at 5 billion bushels but that figure is expected to slightly decline in the future due to plant slowdowns. Nonetheless, the market will be anticipating the stocks report and new crop plantings at the end of March. This will

    set the tone for spring and summer trading coupled with a weather market. With the planting acreage prospects traders will begin to pen-cil in yields and determine an outcome for next years supply and demand table.

    The graphic illustrates why politics in Eastern Europe has had an impact on corn values.

    Cold winter, other factors boost natural gas prices by Ben Straus

    Corn prices up, supported by potential global turmoil in Europe by Jason Sagebiel

    COMMODITIES Prices & Market Analyses

  • MAY 2014 | Ethanol Producer Magazine | 23

    DDGS Report

    Ethanol Report

    March 21 Trade in the ethanol mar-ket seems to indicate additional aggressive buying activity. Traders are focusing on supplies that seem to tighten week-after-week, even when production levels are starting to increase.

    Over the past two months, ethanol futures prices increased more than $1 per gallon. The April contract has moved to the highest price for front-month futures since August 2011.

    Traders are looking for additional support as corn markets continue to show moderate strength over the near future and there is very little indication that supplies

    will grow significantly through the spring and early summer months. As seasonal driving demand starts to increase, there will be even more need to secure short- and long-term supplies by end users on the coasts. Spot ethanol prices are well over $4 per gallon across the East Coast; West Coast locations are nearing the $4 per gal-lon threshold.

    Given the stability in gasoline prices so far this spring, a swift shift to lower de-mand is not expected. But if this supply tightness continues, expect some market reaction during peak summer demand.

    March 21 A look back at the past month can be summarized with one word: Logistics. Railroads encountered a myriad of shipment problems due to cold, snow and overcapacity. This has been an ongo-ing issue west of the Mississippi but the weather really had a severe impact on the rail lines leading to the East Coast. A lot of the ethanol had been heading east from the Midwest plants and the major rail issues that had been impacting dried distillers grains with soluables (DDGS) all winter in the West were now affecting the ethanol movements to the East as well. Consequently, plant runtimes slowed dra-matically.

    DDGS demand has been steady. The slowdown in ethanol production, even though it was a small amount year over year, had a big impact on DDGS avail-ability, and there was significant difficulty

    getting enough DDGS cars into Chicago. That tightness does look to continue into April and probably May. In spite of that, prices have been sluggish, as there is no new demand until the third and fourth quarters of 2014. More deferred time frame trade is starting to be seen, at levels around 115 to 120 percent the value of lo-cal corn.

    The hope of nicer weather bodes well, particularly in the eastern U.S., al-though the western U.S. will still suffer due to strong rail demand. There are still going to be contracted DDGS tons that will need to be fulfilled in the second quarter, but the demand and the market pricing generally weakens as the weather gets warmer. All eyes will be on planting conditions. Another factor is what China decides about whether to take U.S. corn.

    Regional Ethanol Prices ($/gallon)Front Month Futures (AC) $2.815Region Spot RackWest Coast 3.925 3.785Midwest 3.150 3.050East Coast 4.290 3.465

    SOURCE: DTN

    Regional Gasoline Prices ($/gallon)Front Month Futures Price (RBOB) $2.895Region Spot RackWest Coast 2.886 3.119Midwest 2.791 2.837East Coast 2.656 2.947

    SOURCE: DTN

    DDGS Prices ($/ton)Location May 2014 Apr 2014 May 2013Minnesota 240 180 235Chicago 260 225 270Buffalo, N.Y. 260 220 258Central Calif. 330 280 305Central Fla. 292 262 296

    SOURCE: CHS Inc.

    Corn Futures Prices (May Futures, $/bushel)Date High Low CloseMar 21, 2014 4.81 4.76 4.79Feb 21, 2014 4.63 4.56 1/4 4.59Feb 7, 2013 7.23 1/2 7.26 1/2 7.33

    SOURCE: FCStone

    Cash Sorghum ($/bushel)Location Mar 28,

    2014Feb 7, 2014

    Mar 28, 2013

    Superior, Neb. 6.71 4.46 6.71Beatrice, Neb. 6.65 4.14 6.65Sublette, Kan. 6.76 4.30 6.76Salina, Kan. 6.75 4.44 6.75Triangle, Texas 6.77 4.37 6.77Gulf, Texas 7.30 5.57 7.30

    SOURCE: Sorghum Synergies

    Natural Gas Prices ($/MMBtu)Location Dec 31,

    2013Mar 25,

    2014Mar 26,

    2013NYMEX 4.42 4.41 3.98NNG Ventura 4.86 6.07 4.29CA Citygate 4.64 4.96 4.30

    SOURCE: U.S. Energy Services Inc.

    U.S. Ethanol Production (1,000 barrels)Per Day Month End Stocks

    JAN 2014 914 28,344 17,086DEC 2013 949 29,405 16,419JAN 2013 804 24,935 16,419

    SOURCE: U.S. Energy Information Administration

    Logistics problems plus demand result in tight supply by Sean Broderick

    Supply shortage fears spike ethanol prices by Rick Kment

  • 24 | Ethanol Producer Magazine | MAY 2014

    DISTILLED Ethanol News & Trends

    The California Air Resources Board held public workshops on the states Low Carbon Fuel Standard and the related issue of indirect land use change (ILUC) in March. A re-adop-tion concept paper released by CARB as part of the event discusses potential amendments to the LCFS it plans to introduce this year. Of interest to the biofuels industry, the board is proposing a two-tiered system for fuel pathways and pro-ducer facility registration under which conven-tionally produced first-generation fuels would fall into the first tier, while next-generation fuels

    and any fuels that are produced using an innova-tive method would fall into a second tier.

    CARB also indicated it believes that some post-2015 curve smoothing of the LCFS stan-dards will be needed, but there are currently no plans to change the average carbon intensity tar-get of 10 percent by 2020. As part of the work-shops, CARB also released preliminary results of updated ILUC modeling efforts that demon-strate reduced carbon intensity values for corn ethanol and other biofuels.

    CARB to propose LCFS amendments, releases preliminary ILUC revisions

    The U.S. EPA has announced it is taking action to improve the petition process for new renewable fuel pathways under the renewable fuel standard (RFS) program. The process is expected to take approximately six months.

    The improvements are expected to enable more timely and efficient decision making. The agency has outlined three specific elements the improvement process will include. First, a Lean government exercise will be undertaken to im-prove the quality, transparency and efficiency of the EPAs internal review process. Second, the EPA will improve guidance for petitioners, including step-by-step instructions and applica-tion templates for different types of petitions. Finally, the EPA will launch a more automated review process for petitions using previously approved feedstock and well-known produc-tion technologies.

    It is recommended that parties who are considering filing new pathways delay until the improvement process is complete. The EPA, however, has indicated it will continue to re-view high-priority pending petitions during the interim.

    EPA to improve RFS pathway approval process Preliminary ILUC results (g/MJ)

    Corn ethanolSugarcane ethanolSoy biodieselCanola biodieselSorghum ethanol

    304662n/an/a

    23.226.530.241.617.5*

    13.1-4013.5-44.117.6-52.124.8-70.210.9-28.4*

    2009 2014 RangeBiofuel

    *Only about 1,200 runs completed

    SOURCE: CARB

    Some chemical companies focus only on process. Some focus solely on water treatment. Buckman takes a comprehensive approach and looks at the bigger picture return on investment and environment. We look at every aspect of your plants operation,

    tailoring chemistries to boost production and increase profitability from evaporator efficiency to corn oil recovery to water treatment issues. To find out more or to schedule a system audit, contact your Buckman representative or email [email protected].

    2014 Buckman Laboratories International, Inc. All rights reserved.

    Some chemical companies focus on this or that .

    Buckman takes a wider view.

  • MAY 2014 | Ethanol Producer Magazine | 25

    RFA study cites impact of ethanol industry The Renewable Fuels Association

    has released a study conducted by ABF Economics that examines the impact of the ethanol industry on job creation, the economy, household income, and foreign oil displacement.

    The study notes that approximately 210 ethanol plants in 28 states were in op-eration at the close of last year. Together, those facilities have an estimated com-bined nameplate capacity of 14.9 billion gallons. An additional 167 million gallons

    of capacity were under construction as of the end of 2013, with 82 million gallons of that volume being cellulosic and ad-vanced capacity.

    Regarding coproducts, the report estimates the U.S. ethanol industry pro-duced 35.2 million tons of distillers grains last year, along with 2.9 billion pounds of corn oil. These products have an aggre-gate market value of approximately $8.8 billion.

    DISTILLED

    Ethanol Impacts

    Ethanol production Construction Agriculture R&D Total Direct Indirect Induced

    $11,212 $600 $29,340 $2,885 $44,037 $4,867 $20,367 $18,803

    104,5558,020242,34831,858386,78186,50387,164213,113

    $7,010 $439 $21,174 $2,086 $30,709 $4,203 $15,795 $10,712

    GDP (in millions)

    Jobs Income (in millions)

    SOURCE: ABF ECONOMICS

    Aventine Renewable Energy is replacing three aging coal boilers with natural gas-fired boilers at its ethanol plants in Pekin, Ill. The improvement is one component of an ongoing two-year strategic plan to bring the plant back up to and above original production levels.

    The Pekin complex includes a wet mill eth-anol plant and smaller Fagen Inc.-designed dry mill ethanol plant and a food- and feed-grade yeast plant. Together, the ethanol plants have a combined capacity of 160 MMgy.

    Mark Beemer, who became CEO of Aven-tine in December 2012, said the previous man-agement team put zero capital expenditure into the facilities for seven or eight years. As a re-sult, the three plants were doing poorly.

    Following its September 2012 transition from a publicly traded company to a private company, Aventine completed fundraising for repair and maintenance work at the Pekin com-plex. A capital expenditure program of roughly $30 million commenced in June 2013. As a re-sult, the facility has already broken its records for ethanol production.

    Aventine replaces boilers at Pekin ethanol plants

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  • 26 | Ethanol Producer Magazine | MAY 2014

    DISTILLED

    In March, South Dakota Gov. Dennis Daugaard announced the state was launching a six-month E15 trial using state fleet vehicles. As part of the initiative, E15 is being made available at four major state fueling sites in Brookings, Pierre, Rapid City and Sioux Falls.

    The state will fuel flex-fuel vehicles (FFVs) and some of its newer non-FFVs with E15. South Dakotas fueling sites currently provide primarily E10 for its fleet vehicles. FFVs, how-ever, make up more than 58 percent of the state fleet.

    After the trial, the state will evaluate how the use of E15 affected the fleet and determine how to efficiently utilize homegrown ethanol in the future.

    South Dakota is a large ethanol producer, and our state has significantly benefitted from the ethanol industry, Daugaard said. The goal is to use more of our homegrown fuel by using E15, the newest fuel in the marketplace.

    SD kicks off E15 trial

    Iowa RFA: State set E85 sales record The Iowa Renewable Fuels Association

    recently announced that the state set a new E85 sales record last year. Iowa Department of Revenue data shows that total E85 sales reached 10.85 million gallons in 2013, a 20 percent increase over 2012 sales.

    During the fourth quarter alone, more than 2.78 million gallons of E85 was sold in Iowa, setting a new record for the quarter. Sales during the three-month period were

    up more than 67 percent from the sale quar-ter of 2012.

    Record Iowa E85 sales prove the fed-eral renewable fuel standard is working as intended, and the EPA should not reverse course on the policy as they have pro-posed, said IRFA Policy Director Grant Menke, noting that E85 is currently sold at more than a $1 discount to gasoline at the wholesale level.

    Iowa Sales of E85 (in million gallons)

    20132012201120102009

    Q1

    1.832.322.521.611.12

    2.622.313.72.771.79

    2.781.661.942.081.66

    Q2 Q3 Q4

    3.612.782.572.851.96

  • MAY 2014 | Ethanol Producer Magazine | 27

    Startup licenses ethanol-to-hydrocarbon processCalifornia-based startup company Vertimass

    LLC has licensed a technology developed at Oak Ridge National Laboratory that converts ethanol into a hydrocarbon blend-stock. The technology, developed by ORNLs Chaitanya Narula, Brian Davison and Martin Keller, uses an inexpensive zeolite catalyst to complete the reaction.

    Vertimass Chairman William Shopoff said that his company plans to move quickly to make a bolt-on technology easily accessible to ethanol producers. We hope to move from the laboratory

    scale to a commercially available technology within four to six years, he said.

    Preliminary ORNL analysis in collaboration with the National Renewable Energy Laboratory shows the process could be retrofitted into existing plants at various stages of ethanol purification. The process produces minimal amounts of ethylene byproduct and tests indicate the catalyst can be op-erated at relatively low temperatures and pressures, and can be regenerated under mild conditions.

    The U.S. EPA has finalized its Tier 3 Motor Vehicle Emission and Fuel Stan-dards. The rule makes E10 the new federal emissions test fuel and finalizes specifica-tions for E85 test fuel for flex-fuel vehicles (FFVs). The EPA said the rules detailed specifications for the E85 emissions test fuel will resolve uncertainty and confusion in the certification of FFVs designed to op-erate on ethanol blends.

    Within the rule, the EPA also indicated that it will allow vehicle manufacturers to request approval for an alternative certifica-tion fuel, such as E30, for vehicles that may be optimized for such an ethanol blend.

    The EPA indicated it intended to final-ize in-use fuel quality standards for E51 to E83 and possibly E16 to E50 as well, but was unable to do so in time for inclusion in the final rule. Those standards could be finalized in a follow-up rulemaking.

    Ethanol blends addressed in Tier 3 rule

    DISTILLED

    SCALING UP: William Shopoff, Vertimass chairman (in back), and ORNL inventors (left to right) Chaitanya Narula, Brian Davison and Martin Keller display the technology they developed. PHOTO: OAK RODGE NATIONAL LABORATORY

  • 28 | Ethanol Producer Magazine | MAY 2014

    TECHNOLOGY

    MORE THAN CORN OIL: Company co-founder Tom Czartoski stands in Valicor's Dexter, Mich., facility. PHOTO: BOB FORAN PHOTOGRAPHY

  • MAY 2014 | Ethanol Producer Magazine | 29

    Corn Oil Extraction

    A new corn oil technology developed by afluid purification company offers multiple coproducts, improved ethanol yield and water balance, and other benefits.

    By Holly Jessen

    Beyond

    TECHNOLOGY

    Valicor Separation Technologies LLC has developed a new modular system that doesnt just extract one coprod-uct, it fractionates multiple coproducts, including more dis-tillers corn oil as well as fiber and high protein animal feed. The company announced in late February that it had received a U.S. Patent and Trademark Office notice of allowance for its Valicor Stillage Fraction-ation Technology, known as VFrac. Valicor already has Corn Oil Separa-tion Systems, its first-generation corn oil separations technology, installed at 40 ethanol plants. As of March, the company was building its VFrac modular system at its Dexter, Mich., facility in advance of instillation at two dry mill ethanol plants. Following midyear startup, we should have some good operating data on both the ICM plants as well as the Delta Ts, says Chris Mahoney, director of Valicors advanced separations group.

  • 30 | Ethanol Producer Magazine | MAY 2014

    TECHNOLOGY

    The $4.5 million fractionation system has a 12- to 18- month payback. In addition, its complimentary to fine grind technology. Ethanol plants with front-end fine grind systems already installed wont have issues with higher suspended solids, or fines, and can gain the benefits of VFrac with one fewer module installed. It actually reduces the cost of our system, Mahoney says.

    The company got its start in 1997 as Solution Recovery Services, separating and purifying industrial fluids. Today, Valicor is 100 percent employee-owned and has con-tinued working in the industrial space while also diversifying into food and beverages, as well as the pharmaceutical and nutraceuti-cal industries. About eight years ago, the company began working on biofuels tech-nologies, starting with biodiesel and then moving into ethanol, says Tom Czartoski, president, CEO and co-founder of the company.

    Specifically, it was the companys work

    on separation technologies for algae that led Valicor down the path of corn oil recov-ery. We put a considerable effort into mi-croalgae, and microalgae was an interesting challenge by way of a single cell that con-tains proteins, carbohydrates and oils. And we focused on developing a technology to accommodate those compounds, or sepa-rate them into streams, he says. Those developments led us back into the ethanol space to apply that technique to separating proteins and separating oil.

    Big Benefits In developing its second generation

    corn oil technology, Valicor achieved sev-eral goals. The first was to develop a pro-cess that works outside the midevaporator, to avoid any confusion with existing corn oil technologies. As a result, VFRAC sepa-rates corn oil from stillage, not concentrat-ed stillage. We wanted to move away from the patent litigation and all the legal issues

    that surrounded all that, says Douglas Co-rey, industry manager, who started working for the company when there were only eight employees.

    After speaking to ethanol produc-ers, Valicor identified key concerns for the new technology. The first was maximizing coproduct revenue, not just through corn oil recovery, but other coproducts as well. Another goal was improving ethanol fer-mentation. The energy efficiency and op-eration of the evaporator train were also targets. Finally, the company aimed for pre-paring for the next stage of cellulosic and clean fiber technologies, once they become a reality. We call it a forward compatible technology because where it is in the whole stillage stream it really lets you get at those cool things in the kernel of corn, says Phil Schoof, senior vice president.

    The technologys hydrothermal treat-ment allows for separation of more corn oil. In fact, VFrac can pull out 1.2 pounds of corn oil per bushel of corn. And thats without the use of any additional chemicals to increase yield. This technology does away with that operating expense need, Schoof says.

    A key feature of the technology is tun-abilityor the option to separate more or less corn oil, depending on market de-mands. Most customers only want to take out about 1 pound per bushel of corn oil, leaving 7 percent fat content in the distill-ers grains, Mahoney says. That allows plants serving different feed markets, which prefer different fat levels in distillers grains, to aim for different corn oil content targets, adds James Bleyer, Valicor program manager, leader of the companys biofuels R&D divi-sion and inventor of VFrac.

    The technology is also tunable in the amount of high protein meal, or VPro, it separates. This additional coproduct is simi-lar to corn gluten meal produced at a wet mill. We want to pull out enough protein to create this high-value protein product

    GOLDEN OPPORTUNITY: Jennifer Aurandt conducts fermentation trials to evaluate residual starch and other process enhancements. PHOTO: BOB FORAN PHOTOGRAPHY

  • MAY 2014 | Ethanol Producer Magazine | 31

    TECHNOLOGY

    without being deleterious to the existing DDG production, Bleyer says. In other words, the existing DDGs have a certain specification that has to be met and, just like we dont want to pull out too much of the oil, we dont want to pull out too much of the protein, so that DDG wont meet that spec.

    Separating out the high protein VPro reduces total distillers grains volume by about 10 percent, says Jennifer Aurandt, technology development program man-ager. The new coproduct contains about 50 percent protein, about 8 percent oil and is lower in fiber than distillers grains. Early feed trials done at the University of Georgia show VPro has higher total metabolizable energy and increased lysine availability. Were excited about this high protein meal and the fact that we can

    PROTEIN GOLDMINE: Tom Sibson weighs out a sample of VPro, high protein coproduct, similar to corn gluten meal, currently under development as an animal feed product. PHOTO: BOB FORAN PHOTOGRAPHY

    Available Features Include: Patent-Pending Membrane Dehydration Module Automated Remote Control Feedstock Flexibility 24/7 Monitoring & Support

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  • 32 | Ethanol Producer Magazine | MAY 2014

    TECHNOLOGY

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    tune it to what the industry likes, she says. If they want less oil, like corn gluten meal, if they want more oil, whatever the animal nutritionist needs to formulate their diet.

    The separations process also creates stickwater, a low-solids liquid stream, frac-tionated from the whole stillage, Bleyer says. Recycling stickwater in the evaporator

    train, for example, has advantages over us-ing thin stillage, which makes evaporators prone to fouling and less energy efficient. Stickwater can also be recycled to the front of the ethanol plant, where the reduced solids mean the ethanol plant can process more corn while maintaining the same tar-get solids levels in the cook process, he said. All in all, the VFrac technology allows for better water balance.

    In fact, sending cleaner recycled water to the front of the plant actually results in better fermentation, Mahoney says. While the number can vary, depending on the amount of residual starches a plant has, testing has shown the technology can result in a 1 to even 2 percent increase in ethanol yield.

    Finally, the technology is able to re-move fiber, which can be used as a cellu-losic ethanol feedstock, among other things. Theres other high-value opportunities for that fiber, other than cellulosic ethanol, cur-

    How VPro stacks up to other feed ingredients

    Crude Protein (percentage)

    Crude Fat (percentage)

    Crude Fiber(percentage) Total metabolizable energy (kcal/kg)

    Lysine (percentage)

    27

    10

    7

    2,829

    0.79

    60

    2.5

    2

    3,695

    1.02

    50

    10

    5

    3,500

    1.73

    DDGS Corn GlutenMeal VPro44

    0.5

    7

    3,344

    2.86

    SoybeanMeal

  • TECHNOLOGY

    QWURGXFLQJ9)5$&pDJURXQGEUHDNLQJVWLOODJHWHFKQRORJ\SODWIRUPHQJLQHHUHGWRRSWLPL]HWKHSHUIRUPDQFHRI\RXUSRVWIHUPHQWDWLRQSURFHVVHV9DOLFRUVSDWHQWHGPRGXODUWUHDWPHQWWHFKQRORJ\LVWKHUVWRILWVNLQGWRWUDQVIRUPWKHHQWLUHVWLOODJHVWUHDPLQWRUHYHQXHJHQHUDWLQJFRSURGXFWV4443)& ,/ ,* 9DOLFRUBKDOISDJHLQGG 30

    HOT COPRODUCT: Technician Olivia Hayden analyzes corn oil quality in Valicors analytical lab. PHOTO: BOB FORAN PHOTOGRAPHY

    rently under development, Bleyer says. It could be an important coproduct for an ethanol plant in the future.

    Valicor is continuing R&D in separating dif-ferent components of the corn kernel and differ-ent applications for the coproducts. On the corn oil side, currently, the two big demand drivers for the coproduct are the animal feed industry, specifically poultry, and biodiesel plants. If we can make products that are better for either one of those customers, thats a great value add, Au-randt says.

    Corey considers VFrac part of the next evo-lution of the ethanol industry. I think you are going to see that the dry mill ethanol market, the longer it exists, the more it matures, will move the coproduct stream much closer to what you find in a wet mill ethanol market, he says. Its only the natural progression.

    Author: Holly JessenManaging Editor, Ethanol Producer Magazine

    701-738-4946 [email protected]

  • 34 | Ethanol Producer Magazine | MAY 2014

    UTILIZATION

    BIODIESEL INPUT: Marquis Energy LLC markets some of the corn oil it produces to one of Renewable Energy Groups biodiesel plants. PHOTO: MARQUIS ENERGY LLC

  • MAY 2014 | Ethanol Producer Magazine | 35

    Distillers corn oil, produced at the majority of ethanol plants today, is in high demand. By Chris Hanson

    Ready Markets Soak Up Corn Oil

    UTILIZATION

    As production of corn oil has increased at ethanol plants, utilization by biodiesel plants, the animal feed industry and the export market have kept pace. Looking specifically at biodiesel, between 2011 and 2013, use of corn oil as a bio-diesel feedstock grew by a whopping 245 percent, according to U.S. Energy Information Administration numbers.

    Theres significant demand today for corn oil, and thats reflected in the pricing, says Joseph Riley, general manager of FEC Solutions, which began buying corn oil in 2005 or 2006. Theres a premium for corn oil today, and I think thats going to continue to be a driver in the market. I think, relatively speaking, its a short-term opportunity for the feed market, and biodiesel will continue to price it out of the feed market.

    Prior to 2000, the corn oil market was relatively small. It grew rapidly in 2008, however. That was the year that Renewable Products Marketing Group and other companies began marketing ethanol coproducts. Currently, RPMG markets corn oil for 12 plants that produce more than 170 million pounds of corn oil annually.

  • OTHER FUELS: Corn oil can also be used as a feedstock for renewable diesel, providing another outlet for the ethanol coproduct. PHOTO: MARQUIS ENERGY LLC

    Main MarketsCorn oils role as a popular feedstock

    choice in the biodiesel arena is quite appar-ent and growing, which made 2013 a great year for corn oil-derived biodiesel. More than 1.04 billion pounds of corn oil were utilized for biodiesel production by the end

    of 2013, an EIA biodiesel production re-port showed, making it the second most popular feedstock choice. During the sec-ond half of 2013, corn oil finally broke the 100 million pound mark not once, but on three separate occasions.

    Corn oil producers have options to sell within local markets, as well as destination

    markets, says Riley. Locally, the oil can be transported via truck to nearby biodiesel plants or feed producers. In the case of Marquis Energy, the company is located relatively close to one of Renewable Energy Groups biodiesel plants, says Tom Marquis, director of marketing at Marquis Energy LLC, which installed corn oil separation

    UTILIZATION

  • MAY 2014 | Ethanol Producer Magazine | 37

    UTILIZATION

    MOLD CONTROL: Corn oil has potential to help address powdery mildew disease in organic farming applications.

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    units in 2008. REG is one of the lead-ing North American biodiesel producers with a 257 MMgy capacity and has been using the feedstock since 2007. Our freight to their facility is pretty reason-able, so that has been the best market for our plant, Marquis added.

    In order to send the oil to other markets within the United States or to export it to foreign markets, producers not located on a rail line would need to utilize a transloading station to transfer the oil from a truck to a railcar. Once the oil is in the railcar, it can be transported greater distances to biodiesel plants and exporting facilities in other states, such as Louisiana and California, he adds. The Californian biodiesel market is favoring corn oil from a carbon-related standpoint.

    These renewable diesel plants in Louisiana are big plants and some of their feedstock is corn oil, Marquis explains. The Diamond Green Diesel

    facility, a joint venture between Valero Energy Corporation and Darling Inter-national Inc., uses corn oil with other feedstocks to produce 137 MMgy of re-newable diesel, he added. So those are big, multifeedstock plants, but even if a portion of it is corn oil, thats still a lot of demand for corn oil.

    Some foreign markets are also be-ginning to use the extracted corn oil for biofuel production. For instance, Neste Oil, uses the corn oil to help produce its NExBTL renewable diesel fuel. The company added corn oil as one of its biofuel feedstocks in July and produced more than 1.2 million metric tons of renewable fuel using distillers corn oil, along with other waste and residual ma-terials.

    Although biodiesel production seems to be the hottest market for corn oil, its use as a feed additive cannot be easily dismissed. Right now, our biggest customer is the biodiesel market. They

  • 38 | Ethanol Producer Magazine | MAY 2014

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    are a very large user of distillers corn oil, says Matt Niemeyer, corn oil merchandis-ing manager at Renewable Products Mar-keting Group LLC. Feed is a close sec-ond.

    Poultry feed applications seem to be the most popular sector of the feed mar-ket, but other groups are beginning to emerge, such as swine feedlots looking for another fat source Niemeyer says. Perdue Farms Inc. has been a pretty big buyer of corn oil into poultry feed, I believe, Mar-quis recalls, Weve shipped some railcars to another poultry operation.

    The good thing about it is that it is a vegetable-based source of energy ver-sus an animal fat or animal-based prod-uct, Niemeyer says. Spreading that data through word-of-mouth and research to

    potential consumers is one way corn oils popularity has been growing, he adds.

    With corn oil meeting the growing needs of the biodiesel and feed industry, producers may need to examine ways to improve the handling and transportation of the material, especially during colder winter months. There may be some im-provements in how the industry handles corn oil to maintain its quality in order to become a better export possibility, Mar-quis says. Thered be more potential for export if there were ways to maintain quality.

    Novel Uses Although the potential for corn oil

    exists in other markets, it is not yet widely being taken advantage of. Some are think-ing of the edible corn oil market, how-ever, advancing into that market would require greater regulation, processing and, of course, capital spending. Theres a lot of cleanup, refining and deodorizing that would need to occur, Riley explains. It would have to be an identical product to a shelf-stable Mazola oil, so there would be significant processing and loss to be able to achieve that standard. The FDA and USDA would also have to give their ap-proval.

    While breaking into the food-grade market seems quite intimidating, there may be additional opportunities in other indus-trial chemical markets. One possibility is pesticide and fungicide applications for organic farming and greenhouse applica-tions. California-based, JH Biotech manu-factures and researches biotechnologies for safer farming applications. It produces the GC-3 organic fungicide and GC-Mite organic insecticide using corn oil.

    Unlike petroleum-based pesticides and fungicides, the corn oil pesticides provide the user a much safer application. With the petroleum pesticides, the user usually needs to be properly trained and li-censed by the state and wear multiple items of protective clothing, says Donald Les-ter, product manager at JH Biotech. As a manufacturer, you have to go through

    'These corn oil-based products will be used on pretty much any organic crop. Everything from all the high-end berry crops to vegetables.'

    UTILIZATION

  • MAY 2014 | Ethanol Producer Magazine | 39

    UTILIZATION

    a lot more testing and approval processes from the EPA to get them on the market.

    Regarding extra processing, corn oil does not have to be a certain grade before being used in pesticide or fungicide produc-tion, Lester says. All pesticides have to be approved by the EPA and they have a list of what they call generally recognized as safe ingredients that you can put into pesticides. If you use everything on that list, it makes it really easy for a manufacturer to get the product registered, and corn oil is on the list.

    Corn oil, which can be combined with other ingredients, will kill soft-bodied in-sects by plugging up breathing tubes on their body, Lester says. The oil can also combat powdery mildew disease that can affect numerous types of crops, such as squash, cucumbers and melons. It puts an oily coating on the leaf, then the fungus doesnt get the chemical signals it needs to find its way into the plant, Lester explains.

    Its pretty simple, but its pretty effec-tive.

    Some of the biggest customers in this arena are commercial-scale, organic farmers and people who tend small, organic gardens. Medicinal marijuana farmers also prefer using the pesticide due to its safety, Lester says. They grow indoors so the humidity is very bad; they dont ventilate a lot so you got the powdery mildew fungus growing in there, and they usually get insect prob-lems, usually with aphids. They dont

    want to spray indoors with a bunch of toxic stuff, so they always use the organics.

    Currently, California is the biggest, organic producing and consuming state, Lester says. These corn oil-based products will be used on pretty much any organic crop. Everything from all the high-end ber-ry crops to vegetables.

    Author: Chris HansonStaff Writer, Ethanol Producer Magazine

    [email protected]

    BIG IN BIODIESEL: A sample of corn oil sits next to Renewable Energy Group Inc. biodiesel produced from the ethanol coproduct. PHOTO: BOB MODERSOHN

  • 40 | Ethanol Producer Magazine | MAY 2014

    EVENT

    MILWAUKEES BEST: Working together, Fagen Inc. CEO Ron Fagen and Wayne Newton of Australias NPH Farming Syndicate cut the expo ribbon at the 2006 FEW in Milwaukee, Wis.

    TRUE SPIRITS: David Kelsall (1945-2008) of Lallemand Biofuels & Distilled Spirits (above left) was awarded the FEWs High Octane Award in 2007. The award presenter, BBI International co-founder Kathy Bryan (1945-2009), received the same award in 2009.

    AT THE MICROPHONE: Raphael Katzen, the late founder of Katzen Engineering, was famous for his challenging speaker enquiries at the FEW. Here, he is pictured at the 2008 FEW in Nashville, Tenn.

    SURVEY SAYS: At the 2003 FEW in Sioux Falls, S.D., industry technology providers faced off against producers in a memorable mock game show dubbed The Family Fuel. On the technology team was (left to right) consultant Greg Heuer, Gunter Brodl of Vogelbusch, Dave Vander Griend of ICM, and Bib Swain of the former Delta-T Corp.

    GLOBAL GATHERING: Today, the FEW draws attendees from 30 countries. Here, Dehua Liu of Bejing, Chinas Tshinghua University, shares his perspectives on ethanol at the 2005 FEW in Kansas City, Mo.

    GOOD ADVICE: In a rare appearance, Martin Andreas of Archer Daniels Midland Co. takes the stage at the 2005 FEW in Kansas City, Mo., to praise the biofuels industry for its success. Listening intently are RFA President and CEO Bob Dinneen (right) and Joe Jobe, CEO of the National Biodiesel Board.

  • MAY 2014 | Ethanol Producer Magazine | 41

    Three Decades StrongThe International Fuel Ethanol Workshop & Expo will celebrate its 30th anniversary in June in Indianapolis, Ind. With plant personnel making up more than a fourth of its 2,000 attendees, the worlds longest-running ethanol event is still Where Producers Meet. By Tom Bryan

    Throughout its first decade, the International Fuel Ethanol Workshop & Expos well-known acronymFEWwas truly apropos. To say it was a small conference back then would have been an understatement. The FEW began in the summer of 1985 as a 40-person gathering in St. Louis. Those who were there remember the workshop being more of a technical retreat for a fledgling industry than a global ethanol production forum. There were no exhibitors. There was no elaborately decorated general session stage. There werent even breakout sessions. It was a one-room meeting for a devoted group of industry colleagues who believed in ethanol and wanted to see the industry grow.

    The technical fellowship that grew out of the early workshops and conferences such as FEW is one of the strengths that still catalyzes the efficiency that this industry strives for today, says Bob Sutthoff, technical sales director at Enzyme Development Corp. and the person who spearheaded the FEW in its early years.

    Growth would not come quickly, for the ethanol industry or the FEW. In the decade that followed that inaugural FEW huddle, the conference remained small, growing in step with the unhurried expansion of the U.S. ethanol industry. The events momentum picked up in the 90s as 200 people attended in 1993, about 400 in 1997, and nearly 700 in 1999. Year by year the numbers picked up as modern dry mill corn ethanol plants were being constructed across the Corn Belt. In 2002, the FEW reached a tipping point, becoming a 1,000-person event with deep international reach.

    In the half-decade that followed, the ethanol industry grew at a whirlwind pace, and so did the conference. Nearly 3,500 people attended the FEW in Milwaukee in 2006 as the ethanol plant construction boom hit stride. The conference reached its attendance high mark in 2007 when 5,000 people returned to St. Louis, followed by 4,000 attendees in Nashville in 2008. By the spring of 2009, however, the industrys rapid pace of growth had fallen off dramatically. The brunt of the banking collapse and the onset of the Great Recession hit the ethanol industry hard, but the industry didnt abandon its favorite summer gathering. More than 2,100 industry professionals showed up in Denver for the 2009 FEW, establishing a new normal attendance. Despite the industrys challenging times, the resolute commitment of its leading producers, service providers and technology companies ensured the shows ongoing success.

    Constancy has defined the FEW since 2009, as it has attracted over 2,000 attendees and 350 exhibitors five years running. More importantly, the FEW draws more than 500 ethanol plant personnel each yearprincipally managementliving up to its billing as the place Where Producers Meet. Today, the FEW remains the largest, longest-running ethanol event in the world, representing an ethanol industry that, in the U.S. alone, is a $44 billion industry capable of producing 14 billion gallons of ethanol annually.

    ANNIVERSARYy

    THE SHOWMAN: Mike Bryan, BBI International chairman and co-founder, gives his annual opening statement at the 2006 FEW in Milwaukee, Wis. Now living in Australia, Bryan will once again return to the FEW in Indianapolis, Ind., this June.

    ONLINEThis year's FEW will be held in Indianapolis, Ind., June 9-12. Early bird registration ends April 28. Visit www.ethanolworkshop.com for details.

  • 42 | Ethanol Producer Magazine | MAY 2014

    EVENT

    A SHARED STAGE: Last year, the heads of all three U.S. ethanol industry associations, RFA, Growth Energy and the American Coalition for Ethanol, sat down together for an Association Roundtable. Joining BBI Internationals Tom Bryan, were (left to right), Growth Energys Tom Buis, ACEs Brian Jennings and the RFAs Bob Dinneen.

    THE BIG PICTURE: Over the years, many FEW general sessions have featured leading researchers, economists and academics who help attendees understand industry issues more broadly. Iowa State University professor Charles Hurburgh joined a forward-leaning discussion on corn at the 2010 FEW in St. Louis. ETHANOLS ORATOR: Renewable Fuels Association President and CEO Bob Dinneen has keynoted the FEW more

    than anyone else. His summer legislative updates always draw a crowd. Here, Dinneen speaks to the industry at the 2011 FEW in Indianapolis.

    PUMPED UP: As midlevel ethanol blends started to emerge in 2008, Mick Henderson of Commonwealth Agri-Energy (left) took the stage with the RFAs Robert White (then with EPIC), along with Ralph Groschen (now retired) of the Minnesota Department of Agriculture and Ron Graves of Oakridge National Laboratory.

    SERIOUSLY, GUYS: BBI Internationals Mike Bryan gets a laugh out of four ethanol producers during the 2003 FEWs general session game show (see additional photo on page 40). On the Producer Team were (left to right) Russ Abarr of New Energy Corp., Danny Allison of Abengoa Bioenergy Corp., Ray Defenbaugh of Big River Resources and Gregg Hayes of Cargill.

  • MAY 2014 | Ethanol Producer Magazine | 43

    The Stages of FEWAs FEW attendance has grown, particularly from 2002 to present

    day, the scale and scope of its general sessions also expanded. Each year, BBIs program team reserves one or two big topic issues for the general session. It has become a tradition to include keynote speeches from high-profile industry leaders like RFA President and CEO Bob Dinneen and Growth Energy CEO Tom Buis, who will keynote this years FEW in Indianapolis on June 10. Its also become customary to feature ethanol plant general managers and other industry thought leaders on the shows big stage each June. Heres a look at some memorable general session moments from the past decade.

    ANNIVERSARYy

    FAST TRACK DISCUSSION: The 2011 FEW general session had a memorable NASCAR theme. Here, Growth Energys Tom Buis interviews NASCAR Brian France. The keynote conversation was followed by a panel that included other NASCAR execut