The U.S. Ethanol Industry

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• The U.S. Ethanol Industry
• Presented by Donna Swanson
• March 29, 2007
• Central Eastern European Biofuels Sustainable Day

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Introduction

• History of Dry Grind Ethanol
• Current Process
• Future Trends

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Early Days of Ethanol

• Brazil (1960s), the first country to adopt energy
  policy mandating ethanol use
• Bureau of Alcohol Tobacco and Firearms granted
  first U.S. fuel ethanol production license in
  1979 to Dennis VanderGriend

Vander Griend takes Project to Washington
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Production Growth in the U.S.Projections through
2008
End of 2007 expect 8.2 Billion gallons capacity
30 US corn crop
Average growth 2950 mmgy gal./yr.
Average growth 770 mmgy gal./yr.
Average growth 75 mmgy gal./yr.
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History of the Dry Grind Industry

• Early 1980s
• 50 plants
• lt4 million L/year
• Early 1990s
• 1st 57 million L/year
• Today 190 to 380 million L/year
• Very large plants possible in future

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Quantitative Research Findings

• A little education goes a long way

INFORMATION EXPOSURE
PRE
POST
Aware AND Very likely/ Likely to purchase
Very likely/ Likely to purchase
Unlikely/ Undecided/ Unaware
Unlikely/ Undecided
Research showed 1 in 3 consumers consider
themselves aware of ethanol and likely to
purchase. After exposure to the benefits, 3 in 4
would choose ethanol.
Source Ethanol Attitude and Usage Study, Hall
Partners, 12/2004
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Educate the Consumer

• Ethanol Promotion and Information Council
• EPIC was formed in the U.S. to help raise
  consumer awareness and demand for ethanol

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Grain Based Fermentation

• Maize based (corn kernel)
• 95 of US industry ferments corn kernels
• Other potentials
• Grain sorghum (milo)
• Small grains (wheat, barley, rye, triticale)
• Fuel ethanol produced exclusively by fermentation
  
• Saccharomyces cerevisiae
• Plant consumption per gallon ethanol
• 34,000 BTU
• 0.75 kW electrical input
• 3 to 4 gallons water
• Majority of water needed for cooling

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Current Process Overview
CO2
Dry Grind Ethanol Plant
Ethanol
Corn or Milo
Water
WDG/DDGS
Methanator
Methane (burn in dryer)
recycle
Cook Water
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Process Performance Today

• 3 to 5 operators
• 97 up time
• Emissions
• lt 91 metric tpy (NOx, VOC, PM, CO, Sox)
• High attention paid to DDG quality

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Process Guarantees

• 2.8 gal. denatured ethanol/bushel
• lt 34,000 Btu/gallon ethanol natural gas
• Electrical usage lt 0.75 kWh/gallon denatured
  ethanol
• Emissions compliance GUARANTEED

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Current Industry Trends

• Further automation
• Larger and larger plants
• Fractionation of corn kernel
• Higher value co-products
• Co-generation of electricity
• Non-natural gas energy sources
• Destination plants

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New Energy Sources

• Wood waste
• Manure
• Landfill gas
• Distillers grains
• Paper mill sludge
• Clean Coal
• Over the fence heat from power plants
• Biomass

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Exploring New Feedstocks

• Cassava
• Wheat
• Sugar/ Molasses
• Barley
• Sorghum
• Cellulose

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Cellulose is Key

• Some experts say that the U.S. has enough excess
  cellulose to replace all imported petroleum
  products

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Tomorrow Cellulosic Ethanol

• Ethanol derived from non-starch or sugar biomass
• Corn stover, wheat straw, sorghum stubble
• Grasses, trees, wood waste
• Solid municipal waste
• Typical structural components of biomass
• Cellulose
• C6 polymer
• Hemicellulose
• C5 and C6 polymer
• Different based on source (corn, wheat, grass,
  trees, etc.)
• Lignin
• Complicated, not able to ferment
• Monomers similar to oil in nature

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Alternative Biomass Sources
NEAR TERM
Wheat Barley
Corn Starch
Sugarcane
Corn Fiber
Switchgrass
Wood Chips
ABUNDANT AVAILABLE
Paper
Woods
Stover
NCERC, 2006
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Cost Comparisons
USDA, March 2005
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Cellulosic Potential

• Challenges
• Production costs are high
• Capital is 3 to 6 times starch plant
• Operational costs significantly higher
• Technology is not proven
• No commercial plants today
• Potential
• Theoretical is up to 140-150 gallons/ton
• Practical limit is closer to 100 gallons/ton
• First plants will be around 50-70 gallons/ton
• Grain based today is 96 gallons/ton
• 60 billion gallons ethanol in US from biomass

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Volume for Conversion
Amounts of feedstocks to produce 10 mL ethanol
Moisture Content Corn 15 Fiber 46 DDG 64 Stover
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NCERC, 2006
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More Challenges

• Biomass purchase
• No good infrastructure exists
• Market not very well developed compared to grain
• Collection
• Harvest window different for grain vs biomass
• Corn kernels harvest window wider than stover
• Quality of grain easy to control
• Drying facilities, uniform crop, good agronomic
  practices
• Stover and residue crops
• Entrained dirt, moisture and biological
  contaminants
• Transportation
• Biomass 1/5 density of grain
• Biomass does not convey well
• Grain flows like water
• Well developed systems for moving and storing

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Expanding Usable Acreage
Source CERES
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Reducing Dollars per Acre
Source CERES
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Increasing Tons per Acre
Source CERES
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Review

• Todays ethanol industry
• Grain and fermentation based
• Tomorrows ethanol industry
• Based on alternative feedstocks
• Technology processing options
• Sugar platform
• Thermal platform
• Biomass research
• Agricultural relevance

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Ethanols Impact

• Ethanol creates jobs
• Average 35 new, full-time, high-paying jobs at
  each plant
• Total outpouring into local economic pool 100
  million
• More than 500 indirect jobs
• Construction impact of 150 million and about
  1,500 jobs
• Ethanol promotes agriculture
• Average corn price rises 10 cents per bushel in
  areas surrounding new plants
• Good returns have encouraged farmer investment
• Ethanol is good for the economy
• 1.5 million/year tax liability
• Gross revenue of 60 million, with 60-70 spent
  within 75-mile radius of plant

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• Thank You!

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For More Information

• Contact
• Donna Swanson
• Director, International Business
• 310 N. First Street
• Colwich, KS 67030
• Phone [phone]
• E-mail info_at_icminc.com

Helpful websites ICM icminc.com EPIC
epicinfo.org Ethanol drivingethanol.org