Ethanol: The Right Time, The Right Place

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Ethanol The Right Time, The Right Place

• Empire Biofuels, LLC
• Romulus, NY

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Empire Biofuels Mission

• The Mission of Empire Biofuels LLC is to improve
  the profitability of New York agriculture by
  building a profitable ethanol facility to provide
  a clean, secure, renewable fuel source for
  America.

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A Carbohydrate Economy

• We need to get on a path away from the fossil
  fuel economy. If we want to be less dependent on
  foreign sources of energy, we must develop new
  ways to power automobiles. - President George W.
  Bush, April 27, 2005
• If future generations can count on energy in
  many different forms, we'll be less vulnerable to
  price spikes and shifts in supply. -President
  George W. Bush, March 9, 2005

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• I am committed to establishing New York as the
  nations leader in the use, development, and
  production of renewable fuels like ethanol.
  Development of a biofuels industry will ensure
  that New York agricultural producers have
  profitable markets for their products and that
  agricultural land is kept in productive use. It
  will ensure jobs and economic activity,
  particularly in rural areas. It will harness the
  power of New Yorks abundant natural resources,
  making products from renewable resources that are
  more beneficial for our environment. And, perhaps
  most importantly, it will decrease our countrys
  dependence on imported petroleum for its energy
  needs. - Governor George E. Pataki

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Why New York?

• NY is a large consumer of ethanol without an
  ethanol facility
• 300 million gallons per year are used within the
  state
• Transportation costs provide a distinct advantage
  for serving the Northeast
• Demand in the Northeast may reach 1 billion
  within 3 years
• Large dairy industry to provide a ready market
  for distillers grains
• Very strong CO2 market in the Northeast
• The state is encouraging ethanol production
• NY could support several properly sized facilities

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Our Products

• Produce 55 million gallons of ethanol as a safe,
  renewable source of fuel.
• Produce 184,000 tons of high quality distillers
  grain to sell as a high-energy livestock feed
  source to the states number one industry.
• Produce 133,100 tons of carbon dioxide to sell to
  the food processing industry.

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Economic Impact

• A 40 million gallon plant has a 169.6 million
  dollar impact on a community. -Donald L. Van
  Dyne, LLC Research Associate Professor at the
  University of Missouri, "Employment and Economic
  Benefits of Ethanol Production in Missouri.
• Empire Biofuels will produce 55 million gallons.

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A recent study found that an average 40 million
gallon per year ethanol plant will have the
following positive impacts on the local community

• Provide a one-time boost of 142 million to the
  local economy during construction.
• Expand the local economic base of the community
  by 11.2 million each year through the direct
  spending of 56 million.
• Our plant is 55 million gallons
• Source Ethanol and the Local Community, John
  Urbanchuk, AUS Consultants and Jeff Kapell, SJH
  Company, June 2002

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Jobs

• Empire Biofuels will directly employ 50 workers,
  not including truckers and rail employees.
• Spin off and co-located businesses can generate
  many more jobs locally (up to 100 jobs)
• In Missouri, a 40 million gallon ethanol plant is
  estimated to generate 1,779 jobs directly and
  indirectly. Donald L. Van Dyne, LLC Research
  Associate Professor at the University of
  Missouri, "Employment and Economic Benefits of
  Ethanol Production in Missouri.
• Our plant will be 55 million gallons.

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CONTINUED- A recent study found that an average
40 million gallon per year ethanol plant will
have the following positive impacts on the local
community

• Increase the local price of corn by an average of
  5 10 cents a bushel, adding significantly to
  farm income in the general area surrounding the
  plant by improving basis which has eroded in
  recent years.
• Increase household income for the community by
  19.6 million annually.
• Boost state and local sales tax receipts by an
  average of 1.2 million (varies depending on
  local rates.)
• Source Ethanol and the Local Community, John
  Urbanchuk, AUS Consultants and Jeff Kapell, SJH
  Company, June 2002

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Impact of RFS by 2012

• Reduce crude oil imports by 2 billion barrels
• Reduce outflow of 64 billion to foreign oil
  producers
• Increase U.S. household income by 43 billion
• Create 234,840 new jobs in all sectors of the
  economy

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Impact of RFS by 2012 Continued

• Add 200 billion to GDP by 2005-2012
• Create 6 bill in new investment
• Result in spending of 70 billion on goods and
  services
• Purchases of feed stocks will total 43 billion

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Ethanol

• Ethanol industry growing
• Growing outside of the corn belt
• California, Colorado, Ohio, New Mexico, Texas
• Plans underway for plants in NY, NJ, PA, MD NC.
  CA, WA, AZ

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Ethanol Economics

• Nation Wide 2005
• Added 32.2 billion to gross output thru
  combination of spending annual operations and
  capital spending
• Spent almost 5.1 billion on raw materials, other
  inputs and goods and services
• Supported the creation of 153,725 jobs
• Increased household income by an additional 5.7
  billion
• Added more than 1.9 billion of tax revenue

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Ethanol Economics

• Nation Wide 2005
• Added 32.2 billion to gross output thru
  combination of spending annual operations and
  capital spending
• Spent almost 5.1 billion on raw materials, other
  inputs and goods and services
• Supported the creation of 153,725 jobs
• Increased household income by an additional 5.7
  billion
• Added more than 1.9 billion of tax revenue

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How Much Ethanol Can Come From Corn

• Will there be enough ethanol for feed, food,
  export and ethanol
• How much corn can go to ethanol without
  disrupting other markets

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How Much Ethanol?

• Increasing corn yields
• Corn yield curve increasing at an accelerated
  rate
• Based on the 1990-2004 trend line, average yields
  are projected to hit 162 bu/acre by 2010
• Biotech hybrid technology will further accelerate
  the yield curve with transgenic traits offering
  increased drought resistance and enhanced
  nitrogen fixation

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How Much Ethanol

• Incremental Acreage Shifts
• As demand for corn increases some acreage will be
  shifted to corn
• ProExporter Network projects 86 million acres may
  be planted to corn in 2011, an increase of 5
  from the 05-06 crop
• There are already projections of up to 85 million
  acres for 2007
• Could bring some CRP ground back into production
• Price could be the incentive for corn to displace
  vegetables, wheat, or soybeans especially in New
  York

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How Much Ethanol

• Demand for Non-Ethanol Corn is Flat
• Corn used for livestock feed is not projected to
  increase significantly in the long term
• Export use is project to be flat
• It could be argued that total non-ethanol corn
  use is likely to flat-line at about 9.1 billion
  bushels in the long term

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How Much Ethanol

• Improved Ethanol Efficiency
• Average ethanol conversion today is 2.8 gallons
  per bushel of corn. Just a few years ago it was
  2.5 gallons/bu of corn
• Corn fiber conversion Fiber accounts for 10 of
  corn kernel. Traditional ethanol process does
  not utilize this portion. Fermentation of the
  fiber can increase ethanol yield from a bushel of
  corn by 10-13
• High fermentable starch hybrids increase yields
  by 3-5

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Other Feedstocks

• Switchgrass
• Wheat
• Willow
• Woody byproducts
• Reed Canarygrass
• This technology is 9 to 10 years away before
  commercially profitable
• Problems Enzyme costs

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Bringing It All Together