A kernel of energy innovation has ethanol industry popping Greg Gordon, Star Tribune November 29, 2005 http://www.startribune.com/stories/535/5751740.html
WASHINGTON - A cooperative in Little Falls, Minn., is spending $8 million so it can make ethanol by burning scrap wood instead of more expensive natural gas. Agribusiness giant Archer Daniels Midland Co. is building a plant that will make five times as much of the gasoline additive as a typical operation. And in Canada and Louisiana, corn stalks, trees and leaves are being tested to see whether ethanol might someday come from a variety of sources instead of the corn that is now its mainstay. After years of struggle in which some wondered whether the industry that converts corn kernels to auto fuel would ever be viable, it appears that ethanol is coming of age. Amid worries about a global oil crunch, innovation and investment are transforming the clean-burning, oxygenated fuel into the leading near-term alternative to petroleum to power the nation's 225 million cars and trucks. "The industry is growing out of its gourd," said Ralph Groschen, a marketing specialist for the Minnesota Department of Agriculture. Ten years ago, he said, "people were saying, 'What if we get these plants built and the ethanol market goes away?' Now they're saying, 'What if we get these plants built, and the ethanol market doesn't grow as fast as it's supposed to?' " Investors, policymakers and researchers are paying attention. Aided by soaring oil prices, ethanol plants that have relied on a 51-cent per gallon excise tax credit to stay afloat are becoming competitive and profitable. And ethanol producers are installing new technologies that burn less natural gas and cut emissions of global warming pollutants -- steps that could muffle ethanol's critics. A mandate in the energy bill that President Bush signed last summer all but guarantees the industry will double its annual capacity over the next five to seven years to more than 7.5 billion gallons. This is after the industry doubled in the past four years, said Bob Dinneen, president of the Renewable Fuels Association, which represents some 80 ethanol-producing firms and cooperatives. In a growth spurt The plants are spreading beyond the Midwest Corn Belt to California, Texas and upstate New York, and more companies are building them, joining tens of thousands of farmers who own shares in ethanol co-ops. Even Microsoft Chairman Bill Gates' investment firm has poured $84 million into Pacific Ethanol Inc., which is planning to build five West Coast plants. Agribusinesses Cargill Inc. and ADM are building super-sized plants that dwarf those common in Minnesota, which make 40 million gallons a year. Taking advantage of its well-positioned grain storage silos and transportation network, ADM owns seven ethanol plants that combined produce 1.1 billion gallons annually, more than a quarter of the industry's 4 billion-gallon output, and the firm will increase that by 500 million gallons with two more plants, spokeswoman Karla Miller said. Brian Silvey, Cargill's vice president and manager for bio-fuels, said his firm is building a 110-million-gallon plant in Blair, Neb. Cargill also is investing in three other 100-million gallon plants in Indiana, Nebraska and Ohio. Nationwide, 93 ethanol plants are making ethanol and another 23 are under construction. In Minnesota, the third-leading ethanol-producing state, 15 operating plants can make up to 523.6 million gallons of ethanol annually and two more are on the way. One reason for the industry's surge is that leading crusaders for American energy independence, such as former CIA director James Woolsey and former national security adviser Robert McFarlane, have embraced it. They envision a gas-and-electric hybrid car with a tank full of E-85 (a gasoline blend that is 85 percent ethanol) that could travel 500 miles for every gallon of petroleum used. Another reason is the decline of the methanol-based fuel additive MTBE, which is being banned by 25 states because it has polluted drinking water supplies. Other alternative fuels are advancing. Rural plants are making biodiesel from soybean oil and animal fats, for example, and the government is trying to develop exhaust-free hydrogen fuel cells. But new legislative measures proposed in Congress in recent weeks aim to make ethanol an integral part of the U.S. energy grid. They would prod automakers to make only flexible fuel vehicles by 2016, offer tax credits for the installation of E-85 pumps and require that every gallon of gas sold contains 10 percent ethanol by 2010. Tall hurdles remain Ethanol still must leap tall hurdles to reach the mainstream. Today, barely 2 percent of the U.S. fleet -- 5 million vehicles -- are configured to operate with more than 10 percent ethanol in their tanks, and ethanol accounts for less than 3 percent of the fuel flowing from gas pumps. And just a tiny percentage of service stations offer E-85, though the Chippewa Valley Ethanol Co. in Benson, Minn., found a way to deal with that problem. It wooed 50 stations to install pumps for gasoline blends containing 85 percent ethanol by offering them discounts of up to 70 cents a gallon. Minnesota is the lone state with a 10 percent ethanol mandate, though Hawaii and Montana have enacted similar mandates that have yet to take effect. Minnesota will require 20 percent ethanol content in 2013. If Congress imposed a nationwide 10 percent ethanol mandate by 2010, as proposed by Rep. Gil Gutknecht, R-Minn., the industry would have to quadruple in size to meet demand. Ethanol supplies are already so tight that the United States imported 46 million gallons this year. Industry has room to grow Ron Fagen, whose Granite Falls, Minn., company Fagen Inc. built 50 of the first generation of ethanol plants and is building 14 new ones, concedes that the industry's heavy reliance on corn also has its limits, but that it also can turn to other grains. "We'll stop making ethanol out of corn when it affects the price of corn flakes," he said. Industry officials figure that will occur when the industry is producing 12 billion to 14 billion gallons of ethanol. "Then you go to barley," Fagen said. "Then you go to wheat. And hopefully, biomass will be ready by then." Dozens of companies worldwide are exploring ways to break down the cellulose in biomass, which is vegetation and agricultural waste. Leading that effort are Iogen Corp. of Canada, which is using enzymes at a demonstration plant in Ottawa, and BC International of Massachusetts is using microorganisms at a pilot plant in Jennings, La. An Agriculture Department study in the spring concluded that by the mid-21st century 1.4 billion tons of biomass could be used each year to make enough ethanol to replace half the oil used in U.S. transportation. On the road to efficiency For now, the industry's technological transformation has revolved around breakthroughs in saving energy and cutting pollution. Critics contend that as much energy is consumed as is created when making ethanol, and ethanol producers are under pressure from the Environmental Protection Agency to cut emissions of volatile organic compounds. The Central Minnesota Ethanol Co-op in Little Falls is building huge bins to hold 1,200 tons of timber cuttings, storm-damaged trees and scrap wood that will replace natural gas as its energy source, said Kerry Nixon, the plant's general manager. He contends the plant will burn "waste energy" and create three units of energy for every unit of fossil fuels burned. The excess steam will be harnessed to create a megawatt of electricity, and a new thermal oxidizer will burn most of the pollutants, he said. In Winnebago, Minn., Corn Plus says it is employing a different cutting-edge technology in which corn syrup is used as fuel. Keith Kor, the plant's general manager, boasts that the process will create six times more energy than it uses. Jim Faulconbridge, a principal in the Roseville firm of LESS Technologies, said it is working with Heartland Corn Products in the southwestern Minnesota town of Winthrop on another process that conserves fuel in the plant's drying processes. It will cut the plant's energy consumption by up to 40 percent and produce marketable corn oil as a co-product, he said. Greg Gordon is a correspondent in the Star Tribune Washington Bureau. _______________________________________________ Biofuel mailing list Biofuel@sustainablelists.org http://sustainablelists.org/mailman/listinfo/biofuel_sustainablelists.org Biofuel at Journey to Forever: http://journeytoforever.org/biofuel.html Search the combined Biofuel and Biofuels-biz list archives (50,000 messages): http://www.mail-archive.com/biofuel@sustainablelists.org/
