March 2013 Ethanol Producer Magazine

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MARCH ISSUE 2013 VOL. 19 ISSUE 3

CONTENTS

FEATURESDEPARTMENTS

6 Editor’s Note Formidable Challenges In Front of Us BY TOM BRYAN

7 Ad Index

10 The Way I See It Global Warming: We'd Better Get a Move On! BY MIKE BRYAN

11 Events Calendar Upcoming Conferences & Trade Shows

12 View From the Hill Stop Them, If You’ve Heard This One Before BY BOB DINNEEN

14 Drive Time to Stop Subsidizing Status Quo BY TOM BUIS

16 Grassroots Voice Big Oil’s Last-Ditch Effort BY BRIAN JENNINGS

18 Europe Calling Intellectual Honesty BY ROB VIERHOUT

20 Business Matters How a Regulator Might View Clean in Place BY TODD PALMER AND ANNA WILDEMAN

22 Business Briefs

24 Commodities Report

26 Distilled

52 Marketplace

48 PROCESSSix Sigma Provides Analytical Tool for Ethanol ProducersWith 85 to 100 inputs, this method identifies key factors for yield BY JAMES FRUGÉ AND RAUL GAMBOA

CONTRIBUTIONS

ON THE COVERPHOTO: CLOUD SELLERS AND GAMAJET

Ethanol Producer Magazine: (USPS No. 023-974) March 2013, Vol. 19, Issue 3. Ethanol Producer Magazine is published monthly by BBI International. Principal Offi 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.

30 CLEANING CIP MattersCIP systems vital but easilyoverlooked in ethanol plantsuccessBY HOLLY JESSEN

40 CENTRIFUGESTuning Up the Decanter Centrifuge Optimizing the balance in dry cake, clarified thin stillage for optimal performanceBY SUSANNE RETKA SCHILL

3232

4040

4848

INSIDE: ANALYZING THE KEY VARIABLES THAT IMPACT YIELD

ALSOFine Tuning CentrifugeMaintenance, OperationsPage 40 www.ethanolproducer.com

Robust CIP Protocol Vital to Plant HealthPage 30

Powerwashing theBottom Line

MARCH 2013

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EDITOR’S NOTE

TOM BRYAN, PRESIDENT & EDITOR IN [email protected]

FORMIDABLE CHALLENGES

IN FRONT OF US

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

I return from the 2013 National Ethanol Confer-ence hopeful but unconvinced that 2013 will be a huge bounce-back, breakthrough year for U.S. eth-anol production. Too many unknowns remain—the lingering drought, the blend wall, cellulosic ethanol’s unhurried arrival—to pretend rosy times are at hand. What I am sure of, however, is that 2013 will be a year of recovery, trial and modifi cation for our industry.

Renewable Fuels Association President and CEO Bob Dinneen had the most diffi cult job in bioenergy on Feb. 6 when he opened his association’s annual conference in Las Vegas with a stirring but pragmatic “State of the Industry Address.” Dinneen reminded us that a historic drought and heat wave caused the industry’s current woes. He lambasted the American Petroleum Institute for trying to impede the development of advanced biofuels. He censured Big Food for swinging at us while we were down. And then he did his thing: He fi red us up and reminded us that better times are ahead.

Dinneen believes it. I believe it. But do the owners and managers of America’s 36 idled ethanol plants believe it? In a city built on bets, some producers sat before Dinneen in Sin City, arms folded, without much to wager. It was a tall order to ask them to look beyond their current challenges, beyond crazy expensive corn, fl agging gasoline demand and negative margins.

Yes, producers should be encouraged by the fact that ethanol production is expected to rebound to predrought levels later this year, but America’s heartland remains locked in drought. If dry weather persists into the planting season, analysts say, so will high corn prices.

The U.S. Energy Information Agency expects ethanol’s share of the gasoline market to reach 11 percent next year (from 9.7 percent today) as E15 implementation takes hold, but even that conservative level of penetration may be wishful thinking. With U.S. gasoline demand slumping and fuel economy improving, the fi ght for E15 is a battle for the barrel. Implementation will happen slowly and without market pull.

Yes, the renewable fuel standard is more durable than ever having survived the 2012 waiver requests and, more recently, gaining strength from a district court ruling that fundamentally validates the U.S. EPA’s management of the program. However, for every time Dinneen thunders “Don’t mess with the RFS,” fi ve delegates of Big Oil say the opposite—and louder.

And fi nally, yes, millions of cellulosic gallons are on the way. That is a fact. Signifi cant volumes of cellulosic ethanol will come online in the next 18 to 24 months. Ineos, ZeaChem, Abengoa Bioenergy, Poet-DSM Advanced Biofuels, DuPont and others have the potential to be collectively producing upwards of 75 to 100 MMgy by the end of 2014. But will the industry actually produce 14 MMgy this year, as the EPA’s proposed RFS volumes would require? I’d like to think so. But like the rest of challenges in front of us, it would be a formidable task.

MARCH 2013 | Ethanol Producer Magazine | 7

TM

EDITORIALPRESIDENT & EDITOR IN CHIEF

Tom Bryan [email protected]

VICE PRESIDENT OF CONTENT & EXECUTIVE EDITOR Tim Portz [email protected]

CONTRIBUTIONS EDITOR Susanne Retka Schill [email protected]

FEATURES EDITOR Holly Jessen [email protected]

NEWS EDITOR Erin Voegele [email protected]

COPY EDITOR Jan Tellmann [email protected]

ARTART DIRECTOR

Jaci Satterlund [email protected]

PUBLISHINGCHAIRMAN

Mike Bryan [email protected]

CEO Joe Bryan [email protected]

SALES VICE PRESIDENT, SALES & MARKETING Matthew Spoor [email protected]

EXECUTIVE ACCOUNT MANAGER Howard Brockhouse [email protected]

ACCOUNT MANAGERSMarty Steen [email protected] Brown [email protected]

Andrea Anderson [email protected]

CIRCULATION MANAGER Jessica Beaudry [email protected]

ADVERTISING COORDINATOR Marla DeFoe [email protected]

SENIOR MARKETING MANAGER John Nelson [email protected]

EDITORIAL BOARDMike Jerke, Chippewa Valley Ethanol Co. LLLP

Jeremy Wilhelm, Cilion Inc.Mick Henderson, Commonwealth Agri-Energy LLC

Keith Kor, Pinal Energy LLCWalter Wendland, Golden Grain Energy LLC

Neal Jakel Illinois River Energy LLCBert Farrish Lifeline Foods LLC

Eric Mosebey Lincolnland Agri-Energy LLCSteve Roe Little Sioux Corn Processors LP

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 © 2013 by BBI International

Please recycle this magazine and remove inserts or samples before recycling

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56 2013 International Fuel Ethanol Workshop & Expo

19 2014 National Ethanol Conference

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THE WAY I SEE IT

Global Warming: We'd Better Get A Move On!By Mike Bryan

As we have seen, drought has a very negative impact on the public image of biofuels. This negative public image is based on the perceived impact of biofuels use of crops as a feedstock. It is replete with fear mongering by those opposed to biofuels, or those who have simply read something somewhere that biofuels negatively impact food prices and world hunger.

Ironically, the effort to reduce global warming through the reduction of CO2 is one of the clear advantages of biofuels. Ethanol has been demonstrated through multiple studies to reduce the emissions of CO2 by at least 20 percent compared to gasoline. The dichotomy is that while ethanol is one of the fi rst things targeted when the effects of global warming in the form of increased heat and drought are present, it remains an important component in helping reduce global warming.

I’m no climatologist, but I fi rmly believe that those who deny that we are going through a period of signifi cant global warming have their heads in the sand. The earth is getting warmer, there is no longer any doubt about that. You can possibly question how much of the global warming is cyclical and how much has been caused by humans, but it’s pretty diffi cult to question the fact that it is occurring. Interestingly, 97 percent of climatologists agree that human activity is having a predominant impact on the rate of global warming, not just by polluting, but by reducing the number of carbon sinks in the world.

So what can we do? First, we can cease stomping on one of the things that has been demonstrated time and time again to have a positive effect in reducing global warming—ethanol. Second, we can support efforts to increase the use of other clean fuels, such as wind, solar, geothermal and natural gas. Third, we can encourage government to reduce carbon emissions through a carbon tax or carbon offsets of some sort. Setting all politics aside, it is an important step that must be taken to demonstrate to the world that we are serious about a healthier planet.

Finally, I suppose the alternative is to do nothing and wait and see if the naysayers are right and this whole thing is just cyclical and anything we do to combat global warming will be a moot point. While the short-term economics of that strategy may be appealing to some, the long-term consequences may be irreversibly devastating.

For me, I like my money on the science, and the science says we had better get a move on!

That’s the way I see it.

Author: Mike BryanChairman, BBI International

[email protected]


EVENTS CALENDAR

International Biomass Conference & ExpoApril 8 -10, 2013Minneapolis Convention CenterMinneapolis, MinnesotaBuilding on InnovationOrganized by BBI International and coproduced by Biomass Magazine, the International Biomass Conference & Expo program will include 30-plus panels and more than 100 speakers, including 90 technical presentations on topics ranging from anaerobic digestion and gasifi cation to pyrolysis and combined heat and power. This dynamic event unites industry professionals from all sectors of the world’s interconnected biomass utilization industries—biobased power, thermal energy, fuels and chemicals. 866-746-8385 | www.biomassconference.com

International Fuel Ethanol Workshop & ExpoJune 10 -13, 2013America’s CenterSt. Louis, MissouriWhere Producers MeetNow in its 29th 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 world—and the only event powered by Ethanol Producer Magazine. Visit our website to reserve premium booth space now.866-746-8385 | www.fuelethanolworkshop.com

Algae Biomass SummitSeptember 30 - October 3, 2013Hilton OrlandoOrlando, FloridaThis dynamic event unites professionals from all sectors of the world’s algae utilization industry including, but not limited to, fi nancing, algal ecology, genetic systems, carbon partitioning, engineering and analysis, biofuels, animal feeds, fertilizers, bioplastics, supplements and foods. Organized by the Algae Biomass Organization and coproduced by BBI International, this event brings current and future producers of biobased products and energy together with algae crop growers, municipal leaders, technology providers, equipment manufacturers, project developers, investors and policy makers. The event is the world’s premier educational and networking junction for the algae industry.866-746-8385 | www.algaebiomasssummit.org

National Ethanol ConferenceFebruary 17-19, 2014JW Marriott Orlando Grande LakesOrlando, FloridaSince 1996, the Renewable Fuel Association’s National Ethanol Conference has been recognized as the preeminent conference for delivering accurate, timely information on marketing, legislative and regulatory issues facing the ethanol industry. With numerous networking opportunities, more business meetings are conducted and contacts made at this conference than any other ethanol conference.866-497-1232 | www..nationalethanolconference.com


VIEW FROM THE HILL

Stop Them, If You’ve Heard This One BeforeBy Bob Dinneen

Call it a blessing or a curse. But one of the realities of having worked for the Renewable Fuels Association for 26 years is that I’ve heard every argument against ethanol there is in Big Oil's bag of malarkey. Whether it's ethanol’s supposed impact on Mexican tamales or energy balance, I’ve heard it all before. One that I believed had been left to the scrapheap of history, however, is the incomprehensible notion that we don’t need biofuels because the U.S. will be energy independent. That idea should have been buried in 1971, when M. King Hubbert’s 1956 prediction of America’s peak oil production proved true, and the U.S. reliance on imported oil began a climb that went unabated until the renewable fuel standard (RFS) was passed. U.S. ethanol production proved to be the remedy to our imported oil addiction, driving America’s dependence down from 60 percent in 2005 to 41 percent last year. Incredibly, even that tired canard has been revived in Big Oil's desperate effort to repeal the RFS.

That’s right. The record oil prices we have seen over the past several years have encouraged new investment in nonconventional oil from shale and tar sands. As a result, domestic oil

production has seen an uptick. Never missing an opportunity, oil stakeholders are now predicting North American energy independence and have insisted that the RFS is now an anachronism, passed at a time when Congress thought we were never going to be able to produce enough oil domestically to meet our transportation needs. We don’t need the RFS anymore, the misplaced narrative goes. “New day, new circumstances,” the American Petroleum Institute’s Jack Gerard has said.

Big Oil’s narrative follows a time-honored tradition, one that an old codger like me remembers. In 1980, we were told there is “as much oil under the north slope of Alaska as there is in all of Saudi Arabia.” Well, maybe not. Alaska fi eld production peaked in 1988 and today is less than a quarter of its peak production. Indeed, Alaskan production is falling so fast some wonder if there will be enough to keep the pipeline fl owing economically.

In 1999, BP trumpeted the Thunder Horse discovery in the Gulf of Mexico. It was supposed to be the biggest discovery ever in the Gulf with an estimated billion barrels of recoverable oil. Well, no. Thunder Horse never even saddled up. It never came close to the 250,000 barrels per day it was designed to produce, losing 63 percent of its production in a single year.

In 2007, oil analysts trumpeted the Elm Coulee fi eld in the Bakken formation of Montana as the largest onshore discovery in the Lower 48 in half a century. Missed it by that much! After about fi ve years of drilling, it was pretty much tapped out and

the rigs dismantled and moved to new more promising sites.

This is the fact. Domestic production from conventional sources continues to fall. Increased production from nonconventional resources will make up some of the shortfall in the near term, but there will be no reduction in price. (Indeed if there were, investments in nonconventional oil recovery technologies would be uneconomic.) And there will be no long-term benefi t. As the Elm Coulee experience demonstrated, these resources are fi ckle and fi nite. These are not long-term solutions to this country’s energy or economic issues. Consider this, technically recoverable tight oil from Bakken shale is 3-4 billion barrels according to the U.S DOE or 20 billion barrels if you believe the oil companies. Annual U.S. refi ner input of crude oil is about 5.5 billion barrels. Thus, whoever you believe, the Bakken only promises six months to three and a half years’ worth of U.S. crude oil consumption. That doesn’t sound like energy independence to me.

Unfortunately, the media and the Congress don’t always remember their history. They seem to have forgotten the lessons of the past. Those of us who do remember must remind them—constantly. We cannot frack our way to energy independence. The need for domestic renewable fuels remains as important as ever. Don’t mess with the RFS!

Author: Bob DinneenPresident and CEO,

Renewable Fuels Association202-289-3835

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DRIVE

Time to Stop Subsidizing Status QuoBy Tom Buis

It came as no surprise that the American Petroleum Institute recently called for a repeal of the renewable fuel standard (RFS), the most successful energy policy this nation has enacted in the past 40 years. Big Oil understands that as renewables enter the marketplace, consumers will increasingly choose home-grown, cleaner-burning American energy instead of foreign oil from some of the globe’s most hostile regions. This cuts into their market share and ultimately their profi ts, so they will stop at nothing to protect their bottom line.

As the biofuels industry seeks to fi nally scale the blend wall, API has launched a multimillion-dollar campaign targeted at repealing the RFS, saying it is broken and that the blend wall is the primary challenge for a workable RFS. When it comes to the blend wall, however, Big Oil companies need only look in the mirror to see who is maintaining the status quo. This is their entire play—if the blend wall can’t be broken, the RFS won’t work. But it is the oil companies that are maintaining the blend wall by erecting every possible barrier to bringing increased blends to the marketplace. While they opine for a free market, they are singlehandedly denying consumers a choice

and savings at the pump by preventing a lower-cost, high-performance alternative such as E15.

Now is the time to take a stand against the continual efforts of oil companies to prevent renewables from entering the marketplace. What is most egregious about this is that our industry and the American taxpayers are subsidizing this campaign by allowing archaic and unnecessary tax incentives. While the ethanol industry has voluntarily given up the volumetric ethanol excise tax credit, nearly a century has passed and the oil industry is still raking in excessive government tax breaks, even though it is among the most profi table sectors operating today. It is time the oil industry stands on its own, just as the ethanol industry does. During a time of fi nancial diffi culty, growing national debt and rising defi cits, we can no longer afford to hand out taxpayer money to the tune of $40 billion over the next decade—the amount Big Oil is to get over the next decade.

President Obama understands that we, as a nation, must move forward in reducing our dependence on foreign oil and make signifi cant strides toward sustainable and renewable sources of homegrown energy. Recently, the president called on the America people to lead in this effort during his second inaugural address, highlighting the importance of cleaner-burning fuels for our environment, as well as the economic benefi ts of jobs created through domestic energy production.

A number of common sense proposals have been put forth to end the senseless subsidies to oil companies. Current taxpayer

handouts that the oil industry receives, as noted by the Offi ce of Management and Budget, include: “1) The enhanced oil recovery credit for eligible costs attributable to a qualifi ed enhanced oil recovery project; 2) The credit for oil and gas produced from marginal wells; 3) The expensing of intangible drilling costs; 4) The deduction for costs paid or incurred for any tertiary injectant used as part of a tertiary recovery method; 5) The exception to passive loss limitations provided to working interests in oil and natural gas properties; 6) The use of percentage depletion with respect to oil and gas wells; and, 7) Two-year amortization of independent producers’ geological and geophysical expenditures, instead, allowing amortization over the same seven-year period as for integrated oil and gas producers.”

At a time when our nation is tightening its belt, managing budget cuts and also looking to transition to sustainable energy sources, nearly century-old tax subsidies for oil companies are unnecessary, especially when these tax breaks are being used to help fund a multimillion-dollar campaign to kill a successful energy policy. Now is the time to move forward in sound government policy. It is not appropriate or even defensible to continue to line the pockets of those who wish to take us backwards in our quest for energy security.

Author: Tom BuisCEO, Growth Energy

[email protected]

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GRASSROOTS VOICE

Big Oil’s Last-Ditch Effort By Brian Jennings

Believe it or not, Big Oil companies have started talking about the blend wall. By dragging their feet on E15, the blend wall is largely a problem of their making—and a 30-some year old arbitrary U.S. EPA rule limiting the percentage of ethanol permitted in gas. But now, the oil lobby has suddenly decided to distort the meaning of the blend wall in a last-ditch effort to kill the renewable fuel standard (RFS) in 2013.

For years, the American Coalition for Ethanol and others have been cautioning about the E10 blend wall, the need for higher blends of ethanol, more blender pumps, and fl ex-fuel vehicles—putting consumers, not oil companies, in control, and doing so in a way that avoids any future blend wall problem. When federal law requires 36 billion gallons of renewable fuel to be used by 2022, much of that ethanol, we must overcome the blend wall.

Here’s why oil companies are in panic mode today. While ethanol production will remain fl at or decline this year, the RFS provides for annual increases in ethanol use, so refi ners are expected to draw upon their stockpile of renewable identifi cation number credits (RINs). As RIN stockpiles thin, refi ners will need to purchase physical gallons of ethanol to comply with their renewable volume obligations under the RFS for the latter half of 2013 and into

2014. Moreover, at the same time the RFS ensures annual increases in renewable fuel use, new fuel economy standards are shrinking overall gasoline consumption in the U.S. When the RFS2 was enacted in 2007, we consumed around 150 billion gallons of motor fuel. Today that total is closer to 130 billion gallons. An RFS calling for ethanol use to rise from 13.8 billion gallons in 2013 to 14.5 billion gallons in 2014, while the overall gasoline pool is shrinking, means refi ners can no longer refuse to comply with the RFS by dragging their feet to adopt E15.

And it’s E15 that’s got the oil lobby talking about the blend wall. The idea of farmers and ethanol producers taking more market share via E15 is giving Big Oil sleepless nights.

Enactment of the RFS2 in 2007 disrupted the profi table status quo of oil companies (and many others). What ensued was an onslaught against the RFS and ethanol industry in general. The oil lobby has orchestrated attack campaigns, petitioned to waive the RFS, in 2008 and 2012, both denied, and fi led more than half a dozen lawsuits. Bruised but not broken, the ethanol industry remains on its feet, so Big Oil has nothing left to do but distort the meaning of the blend wall as something that is unworkable and forces them to adopt E15.

For those of us who view the need to overcome the blend wall and increase E15 use this year a top priority, the leverage we have is the RFS. The oil

lobby views 2013 as its last best hope to repeal it. ACE is supporting the Fuels America RFS campaign, designed to counteract opposition efforts to distort ethanol’s reputation inside the Beltway. This month, we’re also hosting our fi fth annual grassroots DC fl y-in. It is the grassroots who put a human face on the blend wall and make the most compelling case for keeping the RFS.

ACE’s grassroots fl y-in doesn’t just tell the ethanol story, it shows the ethanol story. We show Congress how the blend wall affects real people when 60 grassroots ethanol supporters from dozens of states and various walks of life take the time to personally explain why the RFS and E15 are important to them. We prove how ethanol results in food and fuel when those same grassroots lobbyists show members of Congress and their staff samples of No. 2 yellow corn, distillers grain, corn oil and other coproducts from ethanol production like soap (yes, soap). Take it from me, as a former congressional staffer, showing your story is more effective than just telling it.

Welcome to the blend wall conversation, Big Oil. When our grassroots is successful in showing Congress why it’s important to keep the RFS to overcome the E10 blend wall, we look forward to your helping us prove the safety, affordability and reliability of E15.

Author: Brian JenningsExecutive Vice President

American Coalition for Ethanol605-334-3381

[email protected]

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EUROPE CALLING

Intellectual HonestyBy Robert Vierhout

Over €51 billion ($68.6 billion) turnover. Almost €5 billion net profi t. These are the core 2012 annual results of Dutch/British food company Unilever, the company that is big in selling small ice creams. Impressive results in times of economic crisis and circumstances that they describe as bringing “intense competition and volatile commodity costs.” The other Big EU Food producer Nestlé has not yet published its annual results, but in the fi rst six months it already showed a net profi t of €4 billion. I assume it will be double by the end of 2012. With this level of turnover and profi t, I am surprised that these two companies maintain their aggressive views on biofuels.

Recently the Nestlé chairman, who also is member of the board of ExxonMobile and chairman of Formula One, said to Reuters that biofuels helped boost food prices. Very likely his company is more to blame for higher food prices than any biofuel producer in the world. In any case, Nestlé’s profi t did not suffer from higher commodity prices and Nestlé wasn’t forced to shut down plants because of the drought we had last year. He is quoted saying that “it is really unbelievable that when we have insuffi cient food in our world that we give

it to cars.” This shows the man’s lack of intellectual honesty.

As usual, he is mixing up commodities and food on purpose. He knows that the corn and wheat for biofuel is all feed quality and doesn’t impinge on the Mexican tortilla or a loaf of bread. But besides this fact, he is ignoring that this year the world is producing a huge mountain of 2.2 billion metric tons of grain (USDA data). That is more than the world population can eat. If people do not have access to food, it is because they cannot afford it. This is where Big Food is intellectually not honest.

We see the same lack of intellectual honesty in the fi rst draft report on biofuels and food security produced by a group of so-called experts for the United Nation Food and Agriculture Organization’s Committee on World Food Security. The experts were asked to “conduct a science-based comparative literature analysis ... of the positive and negative effects of biofuels on food security.” Maybe, in the expert’s brief, the word “positive” was deleted for it has become one long witch-hunt against biofuel policy all over the globe.

The report is not the literature review requested and far from scientifi c. I have been looking for a methodology to justify the literature referenced but couldn’t fi nd any methodology. Nor could I fi nd a section on coproducts and the implication for feed/food supply—an item not to be swept under the carpet, when one

assesses biofuels and food security. A major 550-page-plus FAO study on biofuel coproducts issued last year doesn’t appear anywhere in the references. It is an opinionated, selective report drafted by a group of people of whom some have never ever said one positive word on biofuels in their life. It is shocking that the FAO is allowing this sort of biased report to be drafted.

The global biofuels industry needs to take this report seriously, even the fact that it has been drafted. For me, this is a warning sign that we can expect a new wave of attacks on biofuel policy later this year. As usual, several NGOs will use this report to claim that the most important international organization on food affairs wants biofuel policy to stop. They will not care if the report is biased. For them intellectual honesty doesn’t matter either. Stopping biofuel justifi es whatever means it will take—even if that involves spinning and telling half-truths, using methods that go against the moral integrity these organizations claim to embrace.

Author: Robert VierhoutSecretary-general, ePURE

[email protected]

JW Marriott Orlando Grande Lakes | Orlando, Florida | NationalEthanolConference.com

YOU R CALENDAR!

FEBRUARY 17-19, 2014


BUSINESS MATTERS

How a Regulator Might View Clean In Place By Todd Palmer and Anna Wildeman

The clean in place (CIP) process is something every ethanol producer knows well—when it is scheduled, how long it will take, how much wash water generated, etc. There is one additional issue producers must pay attention to: what air emissions are generated by the CIP process and how, if at all, are those emissions authorized by existing regulations or permits? The U.S. EPA is increasingly paying attention to these issues and so should you.

In 2012, EPA issued Clean Air Act Section 114 Information Requests to several ethanol producers asking for documentation and air emissions data concerning typical CIP activities. Section 114 of the Clean Air Act provides EPA broad authority to request information from any person who owns or operates an emission source, who manufactures emission control or process equipment, or any other person the agency believes can assist in achieving its regulatory or enforcement objectives. In issuing a Section 114 Information Request, EPA may be trying to develop a regulatory scheme for an industry, develop an enforcement action against a particular company for violations of the Clean Air Act, or simply develop a better

understanding of how an industry handles some operational or technical issue. In the context of CIP emissions, EPA likely issued the 2012 Section 114 Information Requests to better understand the CIP process, the quantity and nature of emissions that are generated from CIP, and how well producers manage those emissions. It is possible that EPA or a state agency will use this information to develop specifi c emission limitations or work practice standards for CIP activities. This information could also launch an industry-wide enforcement initiative, however.

Historically, air emissions from the CIP process have not been uniformly or explicitly accounted for in air permits. This is likely due, in part, to the diffi culty in quantifying these emissions, in particular the practical diffi culty of how and when to measure emissions during the CIP process. Producers and regulators may have also considered these emissions to be de minimis and therefore of little regulatory consequence. Be that as it may, ethanol producers should take note of regulators’ recent interest in these emissions and address them as appropriate.

For example, producers need to review all applicable air permits prior to undertaking CIP activities to ensure that all permit requirements are being met and that the facility’s permits authorize the planned activities. This includes meeting applicable state regulations and permit obligations, if any, for reporting to regulators the

undertaking of CIP activities, the bypassing of a pollution control device and the emissions generated during the process.

If CIP-related emissions are routed to a pollution control device, be sure that your air permit authorizes such a confi guration. A permit term requiring that fermentation-related emissions be routed to a pollution control device “at all times” could be interpreted as precluding a bypass during the CIP process. For these types of permit limitations, it is important to closely review what the permit means by “fermentation” and whether fermentation—as defi ned by the permit—is actually occurring during the CIP process.

If a producer emits CIP emissions to the atmosphere but its air permit doesn’t explicitly address emissions generated during the CIP process, a producer may wish to obtain a written notice from their regulator stating that emissions from the CIP process are authorized and will not result in an administrative enforcement action. A producer should not simply assume that CIP-related emissions qualify for a regulatory exemption for startup, shutdown or malfunction events.

Author: Todd Palmer,Attorney, Michael Best & Friedrich LLP

[email protected]

Anna WildemanAttorney, Michael Best & Friedrich LLP

[email protected]

612-597-9337 | [email protected]


People, Partnerships & Deals

BUSINESS BRIEFS

Novozymes has appointed Peder Holk Nielsen as its new president and CEO, effec-tive April 1. Nielsen will replace current presi-dent and CEO, Steen Riisgaard, who is step-ping down after 12 years leading the company. Nielsen has served seven years as executive vice president and head of Novozyme’s en-zyme business. He has also held management positions in Novozymes and Novo Indstri/Novo Nordisk in business development, re-search and development, quality management, and sales and marketing. According to Novo-zymes, its executive management will organize into a functional structure with all current executive vice presidents, joined by Andrew Fordyce, who currently serves as vice presi-dent of sales and customer solutions.

The Scoular Co. has sold a portion of its interest in Pratt Energy LLC, a 55 MMgy facility in Kansas, to Pratt Biofuel Investors LLC, which has related ownership to Calgren Renewable Fuels. Scoular remains part owner of the ethanol plant, and will continue to oper-ate the grain facility as well as procure all feed-stock and provide distillers grains marketing services for the facility. Scoular acquired the Pratt ethanol plant and adjoining 1.8 million bushel shuttle facility in 2011 from Gateway Plant LLC. Since that time, Scoular has operat-ed the grain facility while seeking an operating partner for the ethanol plant. PBI will take the lead in renovating the facility, with completion expected in the spring of this year. As of the close of the transaction, Lyle Schlyer, presi-dent of Calgren Renewable Fuels, has also been named president of Pratt Energy. He will provide general management and produc-tion expertise at both plants.

Metso has acquired software company ExperTune Inc. The company’s products are widely used as software tools to analyze and monitor the performance of industrial processes. They are also used to identify main-tenance and improvement opportunities. Ex-

perTune’s products will be sold as stand-alone solutions that can be used in any automation system environment, and as part of Metso’s performance business solutions, targeted to optimize plant performance.

A group of Iowa businesses and orga-nizations have announced the formation of the Iowa RFS Coalition. Members of the coalition are committed to protecting and preserving the federal renewable fuel standard (RFS) through cooperative efforts of advo-cacy, outreach and education. Current mem-bership includes DuPont, the Iowa Biodiesel Board, the Iowa Biotechnology Association, the Iowa Corn Growers Association, the Iowa Farm Bureau Federation, the Iowa-Nebraska Equipment Dealers Association, the Iowa Re-newable Fuels Association, the Iowa Soybean Association, Monsanto and Syngenta.

The 100 MMgy Patriot Renewable Fuels LLC ethanol plant in Annawan, Ill., is no longer for sale. The plant’s owner, Patriot Holdings LLC, took the facility off the mar-ket earlier this year. In mid-2012, the company retained Ascendant Partners Inc. to explore strategic options and in October announced it was exploring a potential sale. While market-ing efforts did result in a number of offers, those offers did not meet shareholder expec-tations. Patriot intends to continue to operate the plant independently for the foreseeable future.

California and Nebraska became home to new E85 fuel pumps in January. A grant awarded by the Nebraska Corn Board sup-ported the installation of two fl ex-fuel pumps at the Stop N Go in Hartington, Neb.. In Cali-fornia, Pearson Fuels was awarded a $1.35 million grant from the California Energy Commission to add E85 dispensing equip-ment at 19 existing fuel stations throughout the state.

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BUSINESS BRIEFSSHARE YOUR INDUSTRY BRIEFS To be included in Business Briefs, send information (including photos and logos if available) to: Business Briefs, Ethanol Producer Magazine, 308 Second Ave. N., Suite 304, Grand Forks ND 58203. You may also fax information to 701-746-8385, or email it to [email protected]. Please include your name and telephone number in all correspondence.

Iowa Gov. Terry Branstad has been selected as chair of the Governors’ Biofu-els Coalition for 2013. The Iowa Renewable Fuels Association congratulated Branstad and noted that his leadership has been instrumen-tal in helping Iowa lead the nation in renewable fuel production and policy. Branstad served as the original chair of the organization, which was then called the Governors’ Ethanol Coali-tion.

Eco-Energy Inc. has announced mar-keting agreements with two ethanol plants. The company has entered into an exclusive marketing agreement with Lincolnway En-ergy LLC, a 50 MMgy facility in Nevada, Iowa. Eco-Energy has also formed a market-ing agreement with Winnebago, Minn.-based Corn Plus Ethanol, a 49 MMgy plant. Eco-Energy is an integrated supply chain company that is focused on marketing, trading, trans-portation and distribution of biofuels.

Cellulosic sugar producer Sweetwater Energy Inc. is partnering with Wisconsin-based Ace Ethanol to produce cellulosic ethanol at its plant for up to 16 years. The con-tract has a potential value of more than $100 million and requires a minimal capital outlay by Ace Ethanol. As part of the agreement, Sweetwater will place one of its cellulosic fa-cilities adjacent to Ace Ethanol and deliver enough refi ned monomeric sugar to produce up to 3.6 million gallons of ethanol per year during the initial phase of the partnership. Sweetwater has formed a similar deal with Colorado-based Front Range Energy.

Pacifi c Ethanol Inc. has contracted to install Edeniq Inc.’s Cellunator technology at its 60 MMgy plant in Stockton, Calif. In the initial phase, the Cellunator will be used on corn grind to increase effi ciencies in yield. In the future, the Edeniq agreement will allow for the integration of propriety enzymes for

cellulosic ethanol production. The company has also closed on a transaction to improve its debt portion and increase its ownership interest in the four plants it operates. Under the agreements, the company purchased $21.5 million of secured term debt of the Pacifi c Ethanol plants and extended the maturity date of the purchased term debt from June 2013 to June 2016.

LifeLine Foods Inc. has received the Safe Quality Food program certifi cation, pro-viding a boost as it moves forward following a fi nancial restructuring. In the restructuring, LifeLine raised $25 million through the sale of preferred stock, and established a $20 mil-lion revolving credit facility with Wells Fargo Capital Finance NA. In addition, $26.5 million in Chapter 100 Bonds were issued with the support of the St. Joseph Economic Devel-opment Partnership.

Freez-it Cleen has announced its pro-prietary dry ice cleaning process is now pro-tected by a U.S. patent. The technology uses dry ice pellets to clean exchange surfaces on a wide variety of equipment found in biofuel production facilities, including thermal oxidiz-ers, boiler tube coils, stack coil economizers and other fi n and tube bundles.

The National Corn Growers Asso-ciation has announced winners of the 2012 National Corn Yield Contest. The contest is in its 48th year and remains NCGA’s most popular program. With 8,262 entries, the 2012 NCGA National Corn Yield Contest neared the participation record of 8,425 set in 2011. The 18 winners in six production categories had verifi ed yields averaging more than 316.32 bushels per acre. The projected national aver-age was 122.3 bushels per acre for the year. Yields from the fi rst, second and third place farmers overall production categories topped out at 384.36.


Jan. 28—Natural gas and crude oil prices in the U.S. are con-siderably below comparative costs elsewhere. As shown in the ac-companying table, natural gas prices are three times higher in Great Britain (and Europe) and fi ve times higher in Japan (and Asia) than in the U.S. American consumers are saving roughly $200 billion per year compared to Europe and over $350 billion per year compared to Asia.

We are also experiencing considerable savings in liquid fuels.

The second table compares U.S. and European crude oil prices, showing U.S. crude trading at roughly $17 per barrel below Brent, the benchmark for world crude oil prices. If the two billion barrels of domestic crude produced last year was priced at international lev-els, our domestic crude oil cost would have been $34 billion higher.

Bottom line: Lower fuel cost in the U.S., compared to elsewhere in the world, is helping generate a manufacturing resurgence that all hope will continue.

Natural Gas Report

Corn Report

USA: A great place to be an energy consumer BY CASEY WHELAN

Carryout-to-use ratio lowest since 1995 BY JASON SAGEBIEL

COMMODITIES

Jan. 28 —Year-end selling and liquidation brought corn to values sub-$7 per bushel. The January USDA report lowered corn carryout to 602 million bushels, a 5.3 percent carryout-to-use ratio. The USDA increased planted acreage to 97.2 million acres and producers harvest 89.9 percent of that acreage. Yield increased to 123.4 bushels per acre allowing for total corn production of 10.78 billion bushels. This is the lowest national yield since 1995-’96 when the carryout was 426 million bushels with a sub-5 percent carryout-to-use ratio. Demand projections increased as feed demand jumped 300 million bushels to 4.450 billion. Total feed demand for coarse grains increased by 9.1 million metric tons. Corn exports decreased by 200 million bushels and corn for ethanol production remained at 4.5 billion bushels.

The Southern Hemisphere production outlook is positive. Corn production in Argentina was estimated at 28 million metric tons (mmt) compared to 21.0 mmt a year ago. Brazil corn production is projected at 71 mmt versus 73 mmt a year ago. Soybean production is estimated to increase by 29.9 mmt from a year ago. Despite the higher projection, weather has not been ideal in Argentina’s corn producing regions. The weather will be monitored closely in the latter growing stages.

The accompanying chart illustrates the current corn carryout and the corresponding carryout-to-use ratio. The market will need to continue to fi nd ways to ration corn to bring corn to a more comfort-able ratio.


DDGS Report

Ethanol Report

DDGS value relative to corn remains at historic high BY SEAN BRODERICK

Ethanol prices firming on gasoline demand BY RICK KMENT

REPORT

DDGS Prices ($/ton)

LOCATION MAR 2013 FEB 2013 MAR 2012

Minnesota 260 245 183

Chicago 282 270 204

Buffalo, N.Y. 275 252 205

Central Calif. 325 308 245

Central Fla. 309 292 216SOURCE: CHS Inc.

Natural Gas Prices ($/MMBtu)

LOCATION JAN 25, 2013 JAN 1, 2013 JAN 1, 2012

NYMEX 3.44 3.35 3.08

NNG Ventura 3.76 3.39 2.99

CA Citygate 3.82 3.56 3.19SOURCE: U.S. Energy Services Inc.

Regional Ethanol Prices ($/gallon) Front Month Futures (AC) $2.378

REGION SPOT RACK

West Coast 2.580 $2.650

Midwest 2.380 2.675

East Coast 2.465 2.890SOURCE: DTN

Regional Gasoline Prices ($/gallon) Front Month Futures Price (RBOB) $2.875

REGION SPOT RACK

West Coast 3.148 2.972

Midwest 2.720 2.897

East Coast 2.861 3.216SOURCE: DTN

Corn Futures Prices (Mar. Futures, $/bushel)

DATE HIGH LOW CLOSE

JAN 25, 2013 7.27 1/2 7.17 1/2 7.20 3/4

DEC 26, 2012 7.06 1/4 6.92 1/4 6.93 1/4

JAN 26, 2012 6.45 3/4 6.33 1/4 6.34 1/2SOURCE: FCStone

Cash Sorghum Prices ($/bushel)

LOCATION JAN 25, 2013

DEC 28, 2012

JAN 20, 2012

Superior, Neb. 6.98 6.64 5.70

Beatrice, Neb. 6.80 6.54 5.77

Sublette, Kan. 7.00 6.73 5.84

Salina, Kan. 7.06 6.74 5.81

Triangle, Texas 7.10 6.97 6.01

Gulf, Texas 7.48 6.98 6.51

SOURCE: Sorghum Synergies

U.S. Ethanol Production (1,000 barrels)

PER DAY MONTH END STOCKS

NOV 2012 840 25,189 20,174

OCT 2012 818 25,352 18,762

NOV 2011 946 28,383 18,308SOURCE: U.S. Energy Information Administration

Jan. 28—The strength of the etha-nol market price continued to morph through the end of January, as the com-bination of tight corn supply levels, steady ethanol production and increased demand for gasoline are the main fac-tors traders are dealing with heading into what could be a volatile spring market. Ethanol futures prices have rallied nearly 20 cents per gallon since the beginning of the year, as extremely large inventory levels were carried into 2013. This level is starting to erode as traders focus on the ability to move additional ethanol through the nation’s fuel system.

Early January posted strong gains in the corn market, where the focus has been on tight corn supplies through the rest of the spring and into the summer, and the continued parched Corn Belt through the end of last year. So far, this winter has created widespread concerns of continued drought conditions, casting doubt on the ability to raise a substantial corn crop in the coming year. Ethanol demand is looking up, with increased clearance of inventory and continued growth expected through the spring, keeping buyers aggressive.

Jan. 28—As February began, prices for DDGS picked up. The plants that have slowed or shut down still have custom-ers that want to use DDGS, and they are being forced to pull from plants that are further away—particularly for those that are using wet or modifi ed distillers. This is having a cascade effect, particularly in the Chicago container market, since cars that were once being shipped in from as far away as western Iowa no longer are.

We have seen the prices of DDGS relative to corn remain historically high, which is likely to continue for at least the next quarter. Corn volatility can drastically affect this, but distillers percentages of corn in the 90s—once a short term de-viance—is now common. Overseas buy-

ers have had a tough time adjusting, but worldwide, DDGS is still a value, espe-cially in containers.

Water levels on the Mississippi are still a concern, particularly with the dry winter in the upper Midwest. Bulk busi-ness has been pretty quiet this winter out of the Gulf and West Coast. The ability to ship a container to China out of Chi-cago for about $45 per metric ton keeps containers more competitive than bulk in Pacifi c Rim markets.

The DDGS market will take the lead from corn prices in what looks to be a pretty volatile spring, especially in the east-ern U.S., where corn supply is more chal-lenging.

DISTILLED Ethanol News & Trends

In early 2013, the U.S. Energy Information Ad-ministration released its fi rst Short-Term Energy Outlook to include fore-casts for 2014. Accord-ing to the EIA’s analysis, ethanol production will re-bound to pre-drought lev-els during the second half of 2013, and continue to grow in 2014.

The expected average production rate for 2013 is 870,000 barrels per day, which equates to an annual production level of approximately 13.3 billion gallons. While production is expected to be maintained at current levels through the fi rst half of the year, the EIA said that production should start to rebound following this year’s harvest, assuming the drought does not continue.

In the outlook, the EIA noted that it expects previously idled ethanol production capacity to come back online in 2014 to help meet the expanding renewable fuel standard volume mandates. Overall, production is ex-pected to average 915,000 barrels per day, or 4 billion gallons per year, in 2014.

Strong ethanol rebound expected in 2014 Enerkem prepares for startup

The fi rst employees hired to work at Enerkem Alberta Biofuels LP’s 10 MMgy cellulosic ethanol plant have begun technical training at Enerkem Inc.’s demonstration fa-cility. Interviews for the next round of hiring are also underway.

“With plant commissioning expected to begin this summer, it’s exciting to see the fa-cility’s fi rst employees join the Enerkem team and start their technical training,” said Vincent Chornet, president and CEO of Enerkem.

The facility's gasifi er is already in place, and the prefabricated process modules were scheduled for delivery by mid-February.

The company has also announced clos-ing on $37 million in additional fi nancing from Waste Management of Canada Corp. and EB Investments, bringing the total invest-ments from the two entities to $52 million.

©2012 Buckman Laboratories International, Inc.

Scaling back costs.How a U.S. ethanol plant cut acid usage and evaporator cleaning frequency by switching to Bulab® 8301 scale control from Buckman.

The challenge.A Midwestern ethanol plant relied heavily on sulfuric acid to lower pH. Unfortunately, acid availability was tight, driving costs up significantly.

The solution.Buckman applied FDA-allowed Bulab® 8301 just ahead of the first evaporator resulting in outstanding scale control and process pH control.

The savings.

optimize water balance and backset usage.

Find out more.®

contact your local Buckman representative. Let us give you a story worth telling.

SOURCE: U.S. ENERGY INFORMATION ADMINISTRATION

DISTILLED

DOE award supports enzyme development

The U.S. DOE has made an award of up to $2.5 million to help Novozymes identify new and effi cient enzymes to produce advanced biofuels and chemicals from corn stover. The company is part-nering with MBI International on the project.

The two companies will spend two years screening natural enzymes to determine the best performing varieties. The selected enzymes will be tested on pretreated agricultural waste for conver-sion to sugar.

The project will utilize MBI’s Ammonia Fiber Expansion (AFEX) pretreatment technology, which was invented by Michigan State University professor Bruce Dale. According to MBI, the technology is compatible with high solids enzyme and fermenta-tion processing, produces minimal waste streams and operates under relatively mild conditions.

In addition to helping Novozymes further its research, the award will also offer a means for exter-nal evaluation of the enzymes, as the DOE requires a government lab to validate performance targets.

The Iowa Renewable Fuels Associa-tion announced that the state’s ethanol plants produced a combined 3.7 billion gallons last year, matching the 2011 pro-duction level. Iowa’s production equaled roughly 28 percent of U.S. ethanol pro-duction last year. According to the IRFA, 2012 marks the fi rst since 2002 that Iowa’s production did not increase year over year.

“2012 will be remembered for the great drought,” said IRFA Executive Direc-tor Monte Shaw. “Due to Iowa’s incredible farmers, the state weathered the drought better than most. Iowa was fortunate not to have an ethanol plant shut down in 2012.”

While most plants reduced production due to the drought, Shaw noted that within Iowa those reductions were offset by an-other plant operating for a full year.

Iowa ethanol production held steady in 2012

The U.S Grains Council has offi cially an-nounced the classifi cation of distillers dried grains with solubles (DDGS) as a nonhazard-ous cargo under the International Maritime Organization. The achievement was a culmi-nation of a process initiated by the USGC in 2010, in coordination with DDGS producers, shippers, and the U.S. Coast Guard.

"The Council successfully organized the effort to classify DDGS as a nonhazard-ous material. That classifi cation ensured lower freight costs to me, in turn increasing returns to ethanol plants," said Steve Markham of Coun-cil member CHS Inc.

According to the USCG, the recommen-dation of the relevant IMO subcommittee and acceptance of that recommendation were ob-tained in 2010 and 2011. Turning a proposal into a mandatory classifi cation, however, is a multi-year process, said Erick Erickson, USGC director of global strategies.

The IMO accepted the proposal to clas-sify DDGS as non-hazardous in Novem-ber 2010, after which the Coast Guard is-

sued a letter to the USGC affi rming that it would consider DDGS as nonhazardous. That letter is no longer needed, as the categorization of DDGS as nonhazardous is now fi nal.

The USGC has also reported that DDGS exports to Japan have increased substantially. During the January-October 2012 reporting period, DDGS exports to Japan reached an all-time high. According to the U.S. Grains Coun-cil, Japan imported more than 384,000 metric tons of DDGS. Exports for the entire year were expected to reach 450,000 metric tons.

DISTILLED

DDGS earn official classification, exports increase to Japan

Western Plains Energy LLC has begun operations of anaerobic digesters at its 50 MMgy plant in Oakley, Minn. The digesters are expected to reach full operational capac-ity in March, at which time the anaerobic digestion system will be capable of produc-ing enough methane to completely refi re the plant’s thermal oxidizer and boiler.

Installation of the system is expected to help the plant produce advanced ethanol from sorghum in the future. To qualify its fuel as an advanced biofuel under the renewable fuel standard, Western Plains Energy must power the plant with methane from its digester sys-tem, as well as utilize other advanced tech-nologies. While the U.S. EPA calls for a com-bined-heat-and-power system to be among those technologies, Western Plains Energy employs other advanced technologies and has petitioned the agency for a separate pathway.

Western Plains installs AD system

2008 101,053 115,446

2009 83,724 165,187

2010 100,688 142,852

2011 77,086 258,786

2012 (Jan.-Oct.) 77,751 306,609

SOURCE: U.S. GRAINS COUNCIL

2009 165,18783,724

2011 258,78677,086

DDGS exports to Japan


Iowa State University’s Center for Agricultural and Rural Development recent-ly published a policy brief on the outlook for ethanol and conventional biofuel renewable identifi cation numbers (RINs) through 2014. The brief, written by economics professor Bruce Babcock, addresses whether banked RINs will be used in 2013 to offset high production costs, or if banked RINs are likely to be held until 2014, when they could help offset low ethanol prices.

Babcock stressed that when the cost to an obligated party to use a banked RIN is less than the lost value for buying ethanol, it will use a RIN meet its obligation. This can cause ethanol use to decline and the price of RINs to increase.

According to Babcock, a signifi cant

portion of these banked RINs are expect-ed to be used this year, due in part to the E10 blend wall and high ethanol production costs. However, the actual use of banked RINs will be highly dependent on this year’s corn yields, the use of sugarcane ethanol to meet RFS advanced biofuel targets, and the biodiesel mandate.

DISTILLED

A 195 MMly ethanol plant in Chatham, Ontario, will supply waste heat and carbon dioxide to an adjacent greenhouse under de-velopment by Truly Green. Greenfi eld Eth-anol-Chatham plant is updating its technol-ogy to condense stack heat through a series of exchanger systems, allowing the ethanol plant to supply hot water to the greenhouse. The water will be returned to the ethanol plant through an expanding cooling water loop.

The project received a $3.2 million grant from Ontario’s Ministry of Agriculture, Food and Rural Affairs. The funding is being used to offset the cost of engineering and specialized equipment. Construction of the greenhouse will be completed in four phases. Once complete, it will cover a total of 90 acres sitting on 120 acres of land.

Ethanol plant to supply CO2, waste heat to greenhouse

Analysis provides RIN outlook


CLEANING

PUSHING IT THROUGH The CIP dilute tank and high- and low-pressure pumps at Glacial Lakes Energy LLC. .

PHOTO: ICM INC.


CLEANING

Neglecting an ethanol plant’s clean-in-place system can drive down yield, ratchet up maintenance costs and even bring production to a grinding halt. BY HOLLY JESSEN

CIP Matters

Because their products are made for human consump-tion, the brewery and phar-maceutical industries have utilized sophisticated clean-in-place systems with all the bells and whistles. The ethanol in-dustry, on the other hand, isn’t subject to the same stringent regulations and there-fore hasn’t traditionally paid as much at-tention to this vital but easily overlooked part of the process. “Ethanol is getting there,” says Troy Humphries, engineer-ing director and owner of Tank Cleaning Technologies Inc., which offers Scanjet equipment and services. “In the last three years (the industry has) really learned a lot about CIP that they didn’t know when they fi rst started to do this seven to 10 years ago. And that’s making a big differ-ence.”

Looking back on the ethanol boom, the industry’s main focus was getting plants built as fast as possible. “It was a matter of get it online, get it producing ethanol as fast as you can—we’ll worry about effi ciency later,” he says. Frankly, mistakes were made, including in the area of cleaning, Humphries says. For exam-ple, he estimates that 70 percent or more of plants built didn’t install cleaning fi ltra-tion systems. “Most everybody is install-ing that now, or going to cleaning units that can handle the high solids level. That

wasn’t considered very much when the plants were being built.”

Jeff Robert, president of Rendez-vous Consulting Inc., agreed. “CIP was typically considered as an auxiliary sys-tem,” he says. “It was a system people recognize needed to be installed but it was not as well-defi ned as it probably should have been.” Like Humphries, he’s seen the industry investing in retrofi ts and up-grades of its CIP systems in the past three or four years.

In batch plants, the majority of dry grind ethanol plants in production, CIP kicks in after each batch, meaning a single fermentation tank would be cleaned ap-proximately 120 times a year. The goal is twofold—prevent fouling and bacterial contamination. For most ethanol facili-ties, cleaning starts with a rinse, followed by pushing a hot water and about a 5 per-cent sodium-hydroxide solution through the system.

If the sodium hydroxide solution falls too far below 5 percent, the facil-ity runs the risk of poor cleaning, which could lead to bacterial infections and lost yield, says Hans Alwin, business devel-opment director for Biofuels Automa-tion. If it goes above 5 percent, it causes foaming, also reducing the effectiveness of the cleaning solution. It also costs some plants money in the form of anti-foam solutions injected into the blend


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CLEANING

If clean-in-place systems are important at grain-ethanol plants, they are even more vital at advanced biofuel facilities. For maximum effi ciency and to avoid system crashes, the equipment has to be “uber super clean,” says John Hyde, chairman and founder of Hyde Engineering and Consulting.

Among other things, the Colorado-based company works with the pharmaceutical, biopharmaceutical and biocommodity industries to design CIP and sterilization-in-place systems, including at specifi c cellulosic ethanol production facilities. Hyde believes it is critical for CIP to be integrated into the design from day one. Doing so can come with signifi cant capital cost savings and improve the chances of success dramatically.

Unfortunately, however—similar to when the fi rst generation ethanol industry was emerging—the advanced biofuels industry doesn’t completely comprehend the necessity of eff ective cleaning. “In our experience, especially with biocommodity plants, and within that especially ethanol plants, CIP is often considered as afterthought,” Hyde says.

For example, he’s seen plants with sections of pipe left out of the cleaning circuit design or with vessels or pipes that don’t drain. Drainage is a key feature needed for eff ective residue removal, and without it the process is vulnerable to contamination.

Cleaning is particularly important for facilities utilizing a genetically engineered organism for fermentation. These organisms aren’t typically as hardy or as fast-growing as nongenetically engineered, native species, he says. If a native species contaminates the process, it will out-compete the genetically engineered organism.

At smaller scale, fermentation equipment can be steam sterilized to get rid of all possible competing microorganisms. “In production-scale equipment, that’s virtually never done,” Hyde says. “It’s just not economically feasible to design vessels that big that can hold the pressure that the steam would require.”

Instead, commercial-scale advanced biofuels facilities typically install a scaled-up version of a CIP system, such as what’s utilized by the pharmaceutical industry. Again, similar to the CIP process in use by the corn-ethanol industry, this likely involves the use of heated water and sodium hydroxide mixture to remove postproduction residue, a potential trap for bacteria and other microbes, he says. The solution is sent through pipes at high velocity and cleans tanks by spraying and generating turbulence. Some companies also add a sanitizing rinse of other solutions, such as hypochlorite or iodine-based products, for surface decontamination. Provided the facility does a reasonable job of cleaning, any remaining bacteria will be killed by high pH and temperatures, Hyde says.

CIP for Advanced Biofuels


cost to produce a gallon of ethanol and at these times and margins that’s not the cor-rect thing to do,” he says. “You’ve got to put a little blood and sweat into fi nding the root cause of why you are running higher lactic acids or acidic acids. It’s not something that you fi nd in a day.”

ICM emphasizes the importance of reducing infection levels by examining an ethanol plant’s piping, reducing dead legs and other areas where bacteria can grow. Sam

Vander Griend, process development man-ager for ICM, pointed to an old saying, “An ounce of prevention is worth a pound of a cure.” An ethanol plant CIP system is much more effective if it isn’t constantly battling existing bacteria.

Fouling falls into two categories, protein and mineral, Vander Griend says. Mineral fouling varies from plant to plant, depending on water quality, which means it’s important that each plant is using the correct cleaning or

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tank. Both too much and too little sodium hydroxide can cause problems, but the big-gest risk is bacterial infection. “Foaming is a nuisance,” Alwin says, “poor disinfections are fi nancially hazardous.”

The fact that CIP solution can be re-used is both a blessing and a challenge for ethanol plants. The dairy industry, for ex-ample, spends big money on CIP and water treatment because it is required to use new CIP solution at each cleaning, Alwin says. The ethanol industry, however, recirculates its CIP solution and it becomes more spent and less effective over time. Pete Fernholz, research fellow in Ecolab’s global CIP food and beverage division, describes it this way. As ethanol plant fermenters go through the CIP cycle, CO2 in the tank neutralizes sodi-um hydroxide, or the caustic soda solution, into sodium carbonate—a far inferior chem-istry for cleaning. “You end up with a very long clean or a very poor clean,” he says.

Fighting Infection, FoulingThe potentially negative impact on yield

is a big reason ethanol plants need to pay at-tention to their CIP systems and practices, says Jason Van’t Hul, industry technical con-sultant for the grain, oil seed and biofuel group of Nalco, an Ecolab company. He references something said by Mike Ingledew, past scientifi c director of The Alcohol School, in a story printed in the January issue of EPM. Ingledew calculated a year ago that 1 to 4 percent yield losses for low infection levels in U.S. ethanol plants could total etha-nol yield loss of 147 MMgy to 588 MMgy. In that context, Van’t Hul considers cleaning and sanitizing an area of 100 percent oppor-tunity for ethanol plants. “I think costwise, people really haven’t looked at it enough to truly understand what the opportunity is to switch some costs away from antibiotics to cleaning and at that end of the day, how that would impact yield and performance through the plant,” he says.

Beyond just collecting data, ethanol plants need to analyze it to fi nd and cor-rect problems, says John Friedig, manager of plant optimization services for ICM Inc. Instead, some plants have a tendency to just buy more antibiotics. “But that adds to the

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CLEANING

Back in 2004, Biofuels Automation started searching for a solution for automated blending of sodium hydroxide for ethanol plant clean-in-place systems. “We saw so many costly manual errors with this procedure,” says Hans Alwin, the company’s business development director, who worked on the project personally.

The result of that search, which the Plymouth, Minn.-based company has marketed to ethanol plants since about 2008, is the Causticity Control Skid, or Causti-Clean. The skid, which comes in two sizes, sits near the CIP blend tank and—using a conductivity-based measurement—gauges the percentage of sodium hydroxide in the CIP mixture. As the mixture is used and becomes spent, a valve automatically opens, adding the correct amount of sodium hydroxide, meaning a perfect dilution every time for more eff ective sanitation.

Plants that blend CIP solution manually have to send a laboratory technician out to test the sodium hydroxide percentage, a cumbersome process that the Causti-Clean skid completes in less time and more accuracy. Although this may not seem like a problem, plants that have installed the automated system say it’s a big plus. “You don’t realize how much of a hassle it is, until you don’t have to do it anymore,” he says. Instead of taking and testing multiple samples a day, the Causti-Clean requires only a simple calibration every two weeks.

Another valuable feature of the skid is CIP solution fi ltration, which was originally added to maintain solution cleanliness for an accurate measurement. Although not every ethanol plant has problems with beer stones, Alwin has witnessed some extreme situations. Beer stones are abrasive, potentially causing damage to pumps, pipes and CIP spray

balls. He talked to one plant manager who said he spends $25,000 yearly on spray ball maintenance parts and labor due to beer stones. Other plants have to send in their strongest maintenance employee to shovel solids out of the CIP tank. “There’s some plants, depending on water chemistry, that have three front-end loaders full of beer stone solids to remove every six weeks,” he says. For those plants, installing the Causti-Clean can mean signifi cant savings in time and money spent on maintenance.

Still, market penetration of the product has been slow. The company has installed it in about 15 ethanol plants, with the most recent order right before Christmas, he says. Although Alwin still believes the system would still have benefi ts for most ethanol plants, the automated system may not be as attractive to facilities that don’t struggle with a combination of bacterial infections and beer stones in the CIP solution. The No. 1 factor in whether the Causti-Clean sells well, however, is the price of sodium hydroxide, which fl uctuates between 5 and 22 cents a pound. Automation of sodium hydroxide blending eliminates overapplication, a common mistake in manual mode. “We’re pretty confi dent in universally stating that we reduce the sodium hydroxide chemical use by 25 percent,” he says, adding that's a conservative estimate. With a 100 MMgy ethanol plant bringing in a truckload of sodium hydroxide about twice a week, the savings can be signifi cant. And, although the company doesn’t have any specifi c data on this, it’s believed that the Causti-Clean aids in better ethanol yield. “Everybody seems to agree that repeatable, eff ective disinfections help maintain high yields,” he says.

Taking CIP Blending To the Next Level


SOURCE: ICM

Solids, or beer stones, in the CIP wash water is another issue that impacts some eth-anol plants more than others, depending on their water quality situation. Solids can dam-age equipment, such as CIP spray nozzles, and can build up in the fermentation tanks. Ideally, an ethanol plant should fi lter solids to between 200 and 300 microns, Humphries says, but not all plants have fi ltration systems in place. A self-fl ushing fi ltration system from Tank Cleaning Technologies costs be-

tween $20,000 and $30,000. “That’s not very much money when you consider that dump-ing that probably costs 70 to 80,000 dollars, a year,” he says, “and that’s not counting the costs of chemistries.”

Humphries has seen ethanol plants with as much as 30 percent solids in their CIP wash water—worse than an offshore drilling rig, known to be the industry with the worst problem with solids. The company worked with a Canadian ethanol plant, Noramera

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raw water treatment method for the type of fouling it is experiencing.

Fouling prevents effi cient heat ex-change, causing an ethanol plant to consume more energy to complete the same amount of work. With today’s low cost of natural gas and electrical power, that might not be a huge concern. “The cost impact of having a nonoptimally clean system is probably fairly minimal in the scheme of things,” Robert says, “but as soon there’s a shift again in utili-ty costs, that whole dynamic can change very rapidly.” In other words, if natural gas prices go up, he predicts it will separate the well- managed and maintained ethanol plants from those with lax cleaning procedures and extreme fouling problems.

Proper CIP practices, chemistry and equipment can also help reduce mainte-nance costs and save wear and tear on equip-ment. Consider an ethanol plant’s evapora-tor tubes, Fernholz says. A company with a good CIP system won’t have to spend as much on cleaning and maintenance to un-plug its evaporator tubes if it has been clean-ing properly throughout the year. “It’s just like your oven. If you clean your oven often you don’t have to go in there with Easy Off and a chisel,” he says, adding that it’s less ex-pensive to maintain. Then there’s the cost of repair to consider. “If it goes on too long you can end up with deformed steel and cracked tube plates and major capital repairs required.”

Solving fouling issues can be a fairly complicated proposition, requiring a look at the original equipment design specifi cations and the expertise of engineers, Robert says. The idea is to check out the technology pro-vider’s specifi cations for items such as pres-sure drops and fl ow velocity profi les to de-termine if current operation falls within the original design parameters. That’s diffi cult to do “in the heat of the battle” of daily opera-tions, he says, but if the problem is ignored too long it can create long-term problems. Touching on the same topic, Fernholz points to CIP supply pump fl ow rates. Is the pump undersized or is it big enough to handle the fl ow rate needed for proper cleaning? “If there is one thing I see consistently, it’s un-dersized CIP supply pumps,” he says.

CLEANING


Bioenergy Corp., Weyburn, Saskatchewan, which had a fairly effi cient CIP system but no fi ltration. The company had a severe solids problem that caused frequent clogging of the cleaning head, requiring it to take fermenta-tion tanks out of service every 30 to 45 days. “They were looking for a short-term solu-tion, which became long-term solution for them,” he says. The company equipped No-ramera with a cleaning head that could handle high solids, which has made a dramatic differ-ence. “They’ve been out there for fi ve years, without one stoppage,” he says.

Optimizing an ethanol plant’s CIP sys-tem can also reduce water use and chemi-cal costs, although this isn’t an area ethanol plants have really delved into as other in-dustries have, Humphries says. He points to Coca Cola’s efforts at reducing water usage at a bottling facility that is about the same size as an ethanol plant. “Just one plant in Cali-fornia, through CIP optimization, saved wa-ter usage into the thousands of tons of water

a year and put the bottom line over $3 million dollars,” he said. “So it’s pretty big.”

CIP Solutions Robert sees a need for industry collabo-

ration on CIP best practices documentation, tailored specifi cally for ethanol plants. He be-lieves there’s room for improvement in the CIP chemistry and procedures ethanol plants utilize. To illustrate, he points to the changes in the yeast and enzymes fi rst used in etha-nol plants. Back in the mid-90s, the ethanol industry utilized products developed for the beverage alcohol industry. Over time, indus-try-specifi c yeast and enzymes were devel-oped and an ethanol plant today would never think of going back to the old products. “I believe the same thing would hold true, if we got working much more diligently in the ar-eas of CIP and cleaning the systems,” he says, adding that it would enhance long-term prof-itability. Partnering with chemical cleaning companies to identify better CIP chemistry

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is an opportunity to bring ethanol expertise and chemical expertise together. “They can help accelerate the learning curve,” he says.

The ethanol industry hasn’t traditionally considered more performance-based chem-istries beyond the current use of sodium hydroxide, Van’t Hul says. However, with the marriage of Ecolab and Nalco, the two companies are well-positioned to assist in this area. In fact, the company is now plan-ning fi eld trials in an ethanol plant to test new chemistry and nonantibiotic methods of yield-loss management, Fernholz says. One potential benefi t is reducing the time needed for a CIP cycle, which would allow an ethanol plant to push more product through the plant or increase fermentation time for higher yield, Van’t Hul adds.

The other side of the CIP chemistry coin is system automation. Compared to other industries, the ethanol industry is less automated, Alwin says, with more processes, including CIP, completed manually by plant employees, even though they could potential-ly be automated. “George knows how to do it,” he says. “George can open that manual valve on the concentrate and watch his wrist-watch and count out how many gallons of sodium hydroxide he needs to put in there.” The problem is what he calls the human er-ror factor. What if the employee passes out in the middle or is paged and walks away to take a call—something Alwin has actu-ally watched happen, resulting in $10,000 in wasted chemical.

Friedig agrees that automation can make things faster, safer and more consistent. If CIP procedures are labor-intensive it can get tempting, over time, for operators to cut cor-ners. “Human nature is to take the path of least resistance,” he says. On the other hand, although automation is important, there’s still value in doing a physical or audible check to make sure systems are operating correct-ly. That means periodically listening for the audible sound of the spray ball operating, physically removing spray balls and checking to make sure CIP pump discharge pressure is maintained. “That should be done on a rou-tine basis, if plants are keeping up on preven-tative maintenance,” he says.

Author: Holly JessenFeatures Editor, Ethanol Producer Magazine

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CLEANING


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CENTRIFUGES

SOURCE: ALFA LAVAL


CENTRIFUGES

Proper centrifuge maintenance minimizes unplanned downtime, while well-balanced adjustments impact dryers, evaporators and backset. BY SUSANNE RETKA SCHILL

TUNING UP THE DECANTER CENTRIFUGE

There’s an apt analogy for cen-trifuge maintenance in ethanol plants to how different people view their cars. Some follow the rec-ommended maintenance routine and get the oil changed at the appointed time, regularly swap out windshield wipers and replace tires as they near the end of the expected lifes-pan. Others push the oil changes out to the maximum, only change the wipers when they begin to come apart and wait to change tires until the steel cords are beginning to show.

Chris Fell, market unit manager in sep-aration products at Alfa Laval Inc., says he participated in a study over a decade ago that compared these two approaches to mainte-nance at an ethanol plant. For three years, the cost of preventative maintenance on one set of centrifuges was compared to a second set for which repairs were done as needed. “The cost for the preventative maintenance aver-aged 28 percent less than running on a reac-tive maintenance schedule,” he says.


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CENTRIFUGES

ABRASIVE WEAR The presence of a lot of sand and grit in the process can wear the leading edges of a scroll conveyer faster and is a major contributor to the variable servicing requirements at different ethanol plants.

SEPARATION WORKHORSE Fine-tuning the performance of the centrifuge is important for effi cient dryer operations, minimal evaporator fouling and low-solids backset.

PHO

TO: A

LFA

LAVA

LPH

OTO

: ALF

A LA

VAL

A challenge for the ethanol industry is that some maintenance schedules follow set intervals while others are site specifi c. Fell recommends that ethanol producers benchmark wear characteristics over the fi rst few years of operation and use this data to plan future inspection and main-tenance schedules. “Some people will plan that for every 18 months where others can go 40 months,” he says. “Knowing that in advance is critical, and not making the as-sumption that you leave something go for three years and you’ll be OK.”

The wear characteristics are deter-mined by how much abrasive sand and grit is in the process, Fell says. “It’s a combi-nation of factors. In the ethanol industry, sand content varies depending on where the corn is harvested. Another factor is process water and how it is fi ltered. A third factor, particularly in older plants, is the re-use of fl oor washings from a sump back into the process.”

Plants that experience high-wear char-acteristics, he adds, should consider using one or more forms of erosion protection


specifi cally developed to extend maintenance intervals and protect the equipment. One such technique is a tile system rather than the less-durable hard surfacing on the edges of the of scroll conveyer. “The tiles are expensive as a component,” Fell says. “But in the ethanol industry, we fi nd very little wear on tile assemblies.”

Planning for the big maintenance projects is built around recommended routine tasks, such as greasing the bearings dur-ing a brief shutdown every two weeks and replacing the gear box oil every six months. Dell Hummel, Alfa Laval sales manager for separation equipment in the U.S. ethanol, starch and sugar markets, points out that a plant that operates 24/7 runs roughly 8,000 hours in a year. Referring to the car analogy, he says, “Every once in a while you have to perform tune-ups, that’s where bear-ing changes—every 8,000 hours for conveyer bearings and every 16,000 hours for main bearings—come in.”

Fine-Tuning OperationsHummel, who serves as a decanter specialist supporting the

global ethanol market, explains how fi ne-tuning centrifuge opera-tion affects the front end of the process, as well as the effi cien-cy of the evaporators and dryers. The function of the decanter centrifuge is to dewater whole stillage, which is the water, spent grains and yeast remaining after ethanol is distilled.

The centrifuge separates the suspended solids from the thin stillage (also called centrate) that contains primarily dissolved sol-ids. To use another analogy, the suspended solids are like sand that settles to the bottom of a bucket of water, whereas dissolved solids in the thin stillage are like sugar granules in water. The sus-pended solids are conveyed out of the conical section of the cen-trifuge bowl and become the wet cake that heads to the dryers. The thin stillage is decanted off the other end of the centrifuge bowl. Generally, about a third of the thin stillage becomes backset and is sent to the front end of the process to become part of the makeup water for the next batch of mash. The rest of the thin stillage is concentrated in the evaporators and applied to the wet cake, becoming the solubles in distillers dried grains with solubles.

The challenge for centrifuge operations is to fi nd the right balance between getting the optimal amount of water out of the wet cake to reduce the load on the dryers while maximizing the clarity of the thin stillage to minimize fouling in the evaporators. It is best to keep the level of suspended solids remaining in the thin stillage at about 1 to 2 percent, Hummel says. Too many

‘Performing planned, predictive maintenance and regular process tuning is an important factor in optimizing the complete process.’

— Dell Hummel, Alfa Laval

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CENTRIFUGES


fi ne solids tend to build up in the process and, in the portion used as backset, those fi ne solids that are not fermentable take up valuable space in the fermenter and reduce yields.

Two main variables impact separation effi ciency. “The higher the fl ow rate, the lower the separation effi ciency,” Hummel says. The other main adjustment is the dif-ferential speed between the bowl and the conveyer. The bowl uses centrifugal force to remove the suspended solids while the conveyer, running either slower or faster than the bowl, creates a scrolling action that moves the solids out of the bowl. “If you move the solids out quickly they come out wetter,” Hummel explains. “Because you move them out quicker, there’s not as much solids build-up in the bowl, so you end up

with a cleaner thin stillage.” Conversely, a lower differential speed moves solids out more slowly giving them more retention time in the bowl and the solids come out drier, but there is more potential for car-ryover to the thin stillage.

In some centrifuge designs, another ad-justment can be made to the dams that con-trol the depth of the liquid left in the cen-trifuge pond as the liquids decant off. “If you have a traditional decanter, the deeper you make the pond, the cleaner you’ll make the thin stillage but the wetter the cake,” Hummel says. Alfa Laval’s centrifuge design eliminates that adjustment, he adds. “The machine we use for the ethanol industry has a baffl ed feed zone, which allows us to run with a deep pond to make clean thin still-age, but it blocks the pond from getting to

the conical portion of the machine, so we can still make a dry cake.”

Venting is another critical issue that can be overlooked, Hummel continues. “This is a hot process—the feed material is going in 20 or 30 degrees below boiling for water. You get vapors and steam inside the machine and you can get vapor and steam coming back from the dryer through the conveyer system or from the thin stillage tanks coming back up to the decanters.” If not vented, the housing around the bowl fi lls with steam and makes the bearings run hot, or if pressure begins to build, can even force steam into the bearings. “Once you do that, you reduce the bearing life and could potentially have bearing failures,” he explains. “It is a critical thing.” Utilizing a slight vacuum will help vent the steam off the machines but it is important to ensure the vacuum be equal on both ends of the machine so there is no interference with the movement of the material. This helps avoid a buildup of solids in the centrifuge housing.

Many factors play into the decisions behind how to operate the centrifuges. Some plants, of course, are located near cattle lots that prefer wet cake, thus they don’t have to worry about optimizing the dryers. Most plant operators, though, are well aware that dryers are the biggest energy users in the plant. Yet, while the temptation is to keep the cake as dry as possible, the resulting thin stillage is the bigger issue, Hummel warns. “It’s more of a disruption to let the thin stillage get too dirty. If the evaporator fouls, a shutdown is required in order to clean and that’s not an easy job. If too many unferment-able solids are returned to the fermenter, ethanol production is reduced. Performing planned, predictive maintenance and regu-lar process tuning is an important factor in optimizing the complete process.”

Author: Susanne Retka SchillContributions Editor, Ethanol Producer Magazine

[email protected]

CENTRIFUGES

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CONTRIBUTION

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).

Six Sigma Provides Analytical Tool for Ethanol ProducersFermentation optimization project results in improved ethanol yield.BY JAMES FRUGÉ AND RAUL GAMBOA

PROCESS

With corn costs comprising over 87 percent of the cost of ethanol production, a small improvement in corn-to-ethanol yield can have a large impact on plant profitability. Three reasons suggest why improvements don't always happen. First, ethanol producers in the past have mainly focused on throughput and have historically invested in projects that expand pro-duction. With the current oversupply and margin squeeze, producers are now being forced to focus on reducing production costs. Second, producers have diffi culty accurately measuring yield without a lot of variability, and thus are not getting true measurements upon which to base improvement efforts. Third, many producers depend on a sup-

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plier’s technical support personnel to rec-ommend optimum conditions for the use of products such as alpha amylase, gluco amy-lase, yeast, urea and ammonia. Producers of-ten believe that by optimizing conditions for the use of these products, it will automati-cally result in maximum yield.

These three factors have resulted in less-than-maximum yield improvement. With current economic conditions chang-ing production philosophy from production volume to low-cost production, the last two factors can be addressed by the use of Six Sigma process improvement tools.

The Six Sigma methodology was devel-oped in the electronics industry in the 1990s at G.E., Westinghouse and Motorola. With the outstanding results achieved in this in-dustry, Six Sigma was adopted by the pet-rochemical industry and others. Companies like Dow, DuPont, 3M, Celanese and other major chemical companies saved millions of dollars in applying the statistical and other

Six Sigma tools to operating plants. Both the authors learned the methodology and expe-rienced the savings while working in the pet-rochemical industry.

The Six Sigma method uses a road map for solving diffi cult problems such as yield optimization in the face of multiple vari-ables, including the types of enzymes for both gluco and alpha, type of yeast, pH, temperatures of mix tank, temperatures of fermenters, solid concentration in the mash, urea addition rates, amount of backset, pH of backset, etc. Trying to optimize each of these variables for maximum yield is an extremely diffi cult, if not impossible, task without the use of advanced statistical tools.

Defi ne, Measure, AnalyzeDefi ning is the fi rst step in the Six

Sigma methodology. Defi ning is important because it assures agreement on what the problem is, what the process boundaries are, how to measure the results and who will be


PROCESS

working on the project. Without that agree-ment, projects often suffer scope creep and are soon “trying to save the world.”

The measure step is where the team han-dles the problem of garbage in, garbage out. Without data, it is hard, if not impossible, to make good decisions. First, the team deter-mines how well they can measure the out-put, also known as the Big Y. In the case of fermentation, yield involves measuring how much corn or milo was used in the fermen-

ter batch, the ethanol in the fi nal sample of fermentation, and how many gallons are in the fermenter. It sounds simple in principle but it can be diffi cult in practice. Many plants use high performance liquid chromatography (HPLC) to measure the amount of ethanol in the fi nal or drop sample. The question arises, though, on how much variability from batch to batch is due to the variation of the pro-cess and how much is due to the measuring system (i.e. the HPLC). By analyzing samples

in a prescribed way that represents the range normally seen in the process, the percent variation caused by the measuring system, the HPLC analysis, can be determined. For the measurement system to be good enough for process improvement work, the variabili-ty caused by the measurement system should be less than 30 percent of the variability of the process. The target is no more than 10 percent. The same technique can be used to reliably determine solid content in the mash measurement system.

Once these measurement systems have been proven to be good, they can be used to calculate a batch yield, the Big Y. One pro-prietary and trademarked method for mea-suring batch yield, called YieldCalc, has been developed by the authors.

The next part of the measure step is to determine the inputs (the little x’s) to mea-sure, plus how well they can be measured. The assumption used is that all measure-ments are bad until proven otherwise. A pro-cess map created by the team identifi es all of the inputs to the fermentation process, how they are measured and typical values. Then, a measurement system analysis (MSA) is per-formed on all of the inputs. In a typical plant there are approximately 85 to 100 inputs that need to be checked out.

Many times the MSA serves to verify the measurement is done correctly and stored in the correct place in the data system. This step requires the efforts of operators, main-tenance technicians, management and just about everybody involved in running the process.

After making sure the data being used is good, the data collection on batches begins. It is important to not experiment with any of the variables at this time, since we are try-ing to determine the normal operation of the plant using good data. With all of the inputs captured and a batch yield calculated to show how well or poorly we did, the next step can begin.

In the analyze step, we use Minitab soft-ware to fi nd the important input variables. Minitab is an intuitive statistical software package that has become the de facto stan-dard for Six Sigma analysis. Some people use a package called Jump that also works well.

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PROCESS

First, a graphical analysis gives clues to which inputs have the greatest impact on yield and then statistical analysis determines which ones are most signifi cant. In most processes with 85 to 100 inputs, only three or four have a high impact on the variability of the pro-cess. These critical few Big Xs will be unique to that particular plant. Even though all ICM and all Delta T plants have similar designs for the same overall ethanol capacity, there are differences that make each one unique.

Improve, ControlIn the improve step, once the critical Big

X inputs are known, we need to confi rm their importance and identify any interactions by running a series of trials called a design of experiments (DOE). In a DOE, one runs the plant, varying the important inputs in a specifi c way, from a high value to a low value. Analysis of this data will confi rm the impor-tance of each variable and show how to best optimize the plant for maximum yield. Next, we set the important inputs at their optimum values and run the plant.

The control step is designed to make sure the improvements last. In order to im-prove the plant operations, one must change what one was doing before. Change is hard, however, and there is a tendency to go back to the old ways. The control plan is just a written plan for how we will be sure the im-portant variables will be kept at their best values over the long term, and how to detect when things have drifted off before it is too late.

ResultsSix Sigma was applied by the authors

at a 50 MMgy ethanol plant where the yield was not what it needed to be and varied sig-nifi cantly from month to month. The plant operators also had a diffi cult time determin-ing what impact, if any, a new enzyme or changed process condition had on yield due to the variability in the measurement.

Results of the project are shown in the two bell curves of the accompanying graph showing yield and standard deviation before and after. Yield was improved by 6 percent while the standard deviation was reduced by 52 percent. For a 50 MMgy plant, this yield

improvement would result in over $7.5 mil-lion savings at a corn cost of $7 per bushel. The payback period for these projects typi-cally ranges in the one- to three-month time frame, depending on the existing instrumen-tation and measurement systems.

The reduction in standard deviation of yield measurement allows plants to more ac-curately monitor the impact of new enzymes, yeast or new operating conditions on the most signifi cant metric, yield. Thus, it helps

with implementing further improvements as new technologies emerge in the ethanol in-dustry.

Authors: James Frugé Frugé Consulting.


Raul GamboaChemical Engineer, Consultant



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March 2013 Ethanol Producer Magazine