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Speaker Spotlight

3 Questions with Paula Emberland
Paula Emberland   |  Featured in the panel titled:
Approaches for Assessing and Evaluating the Effectiveness and Value of New Process or Technology Deployments
Tuesday, June 10| 1:30 pm - 3:00 pm   |  View Panel

Benchmarking Business Analyst,
Christianson & Associates PLLP		 Your presentation will identify a number of categories that plants can invest in including feedstock advancement, chemical and process additives, plant process improvements, and advanced biofuel bolt-on technologies. Is interest relatively balanced across these categories or are there some emerging front runners?
Interest seems quite balanced; plants want to leverage their own market strengths. Advanced fuels are big including biobutanol, renewable diesel, and other fuel products. Process advancements and improvements to standard plant processes, enzyme improvements, for instance, are getting a lot of attention. We’re also seeing interest in diversification in feedstock milling, alternative feedstocks, and breakdown options post grind.

In your presentation you plan to outline the required ‘due diligence’ when considering these investment opportunities. What are some of the very first steps in this due diligence?
Risk tolerance varies among plants, and all projects carry different levels of risk to the existing business, so plant risk is the first consideration, even before cost is calculated. Evaluating a plant’s ability to withstand any process interruption is extremely important, and often overlooked, so business interruption is a second factor that must be considered very early in the due diligence process.

Your presentation also promises to take a close look at the impact corn oil has had on plant profitability. Can you provide a general sense of the financial impact corn oil extraction has had on this industry?
Corn oil extraction is a great example of a new technology that has had a positive impact on profitability since 2008. In any given quarter in the past few years, most plants saw corn oil revenue add $.02 -$.08 per ethanol gallon to their bottom line. During 2012, this often meant the difference between a plant being profitable or not.



3 Questions with James Eiler
James Eiler   |  Featured in the panel titled:
Increasing Shareholder Confidence by Increasing Overall Plant Value and Providing Adequate Liquidity Opportunities
Wednesday, June 11| 10:30 am - Noon   |  View Panel

Principal,
Eiler Capital Advisors LLC		 Why is it important for ethanol plant boards to be able to offer liquidity opportunities for minority shareholders?
Many of the ethanol plants are entering 8+ years of operations and their original unitholders/shareholders have investment liquidity needs from estates, divorces, and other cash needs that motivates them to sell some or all of their ethanol units. Many of the LLC’s have used bulletin boards to facilitate liquidity of their units, but most transactions are appearing to incur severe discounts with most sales occurring below 50% of the plant’s current book value.

What are the big challenges in providing these liquidity opportunities?
Many plants have fully utilized their accelerated depreciation which translates that earnings that flow through the K-1 are no longer sheltered by the depreciation schedule. So if a plant earns a million dollars, it has tremendous unitholder pressure to distribute at least 30% of the earnings in a cash distribution to allow the unitholder to pay the taxes on the earnings that are being attributed to his units. This is occurring simultaneously as the 8+ yr old plants are experiencing higher levels of equipment replacement cost capex as well as exploring significant additional plant investments to make the plant more competitive within the renewable fuels industry. These multiple demands on cashflow are often a constant topic of debate within the boardrooms.

What are the outcomes for plant boards that can successfully deploy a liquidity program for their minority shareholders?
Unitholders that need cash from their investment for whatever reason have an opportunity to sell their units at pricing that is significantly better than what is currently being afforded through the bulletin boards. Boards that assist minority shareholders in a structure that is accretive to the benefit of the remaining shareholders, creates a win/win for all unitholders.

A related topic in the board discussions – what is the longer term strategic intent for the ownership group? What do you think the value of your plant in $/gallon of capacity will be in 3 - 5 -7 years and what are the probabilities that this will increase or decrease XX% given alternative political and industry assumptions and scenarios.



3 Questions with Sabrina Trupia
Sabrina Trupia   |  Featured in the panel titled:
Maintaining DDGS Value by Aligning Corn Oil Recovery Strategies with Downstream Fat and Protein Requirements
Tuesday, June 10 | 1:30 pm - 3:00 pm   |  View Panel

Lead Scientist, Advanced Biofuels Initiative,
National Corn-to-Ethanol Research Center		 You will be talking about a 2010 NCERC study that looked at the impact of fermentation completeness, dryer temperature and syrup rate addition on quality characteristics of distillers grains. Please give us a short summary of what the most important finding was.
The study from 2010 was part of the work we conducted with the USDA through a specific cooperative agreement. The purpose of the work was to describe the change in nutritional and physico-chemical characteristics and to correlate them to processing parameters. Nutritional characteristics do change as a function of changing process parameters (dryer temperature, syrup application, completeness of fermentation).

Another study, completed last year, used debraned degermed corn (DDC) as the feedstock. What was the most important finding in this study?
The study was carried out in part as a study of power consumption in the fractionation unit operation (vs. conventional grinding with hammermill). We are looking at the DDGS data right now, but as far as the study findings, we see that from one fermentor to another, the fermentation of DDC is a lot more reproducible than that of hammermilled corn.

How will comparing the results of these studies provide new insight into more sustainable ethanol production pathways?
Fractionation would help optimize the utilization of the whole kernel. As new markets are sought for coproducts, fractions of corn can be utilized for many new purposes, from feed to food-grade products.



3 Questions with Bob Randle
Bob Randle   |  Featured in the panel titled:
Strategies for Growing Advanced Biofuel Production from the Fertile Ground of Currently Installed Starch Capacity
Wednesday, June 11 | 10:30 am - Noon   |  View Panel

Vice President, Commercialization,
xF Technologies		 Tell us about xF Technologies’ new fuel additive. What makes it unique and what is its potential?
xF Technologies has developed a proprietary chemical process to convert carbohydrates (corn) or biomass, and ethanol into a novel, commercially viable fuel additive that provides liquid transportation fuels with high levels of oxygen. This chemical oxygenate (furoate ester, referred to as “xF”) improves emissions while preserving the fuel economy (MPG) of the vehicle. The molecule can be blended on top of E10 or E15 or blended straight with diesel or biodiesel. The worldwide market for fuel oxygenates is currently more than $100 billion per year and more than $40 billion in the U.S. for ethanol in gasoline alone. This does not include the new market for an ethanol-based oxygenate additive in diesel. Additional potential markets exist in oil field chemical applications, corrosion inhibition and value-added coproducts.

How is the product development coming along? Have you started pilot or demonstration projects?
Basic R&D on the molecule development and production process has been completed over the last two years. A 25,000 gallon per year pilot plant is currently being commissioned in Albuquerque with full product output expected in June. Substantial sample quantities of the products will be available by midsummer. Extensive engine testing on both gasoline and diesel fuel blends have been successfully completed by Southwest Research Institute in San Antonio, validating the functionality of the molecules in actual fuel applications. We have one commercial agreement, with several others probable in the near term.

Are there co-location synergies for ethanol producers?
There are several co-location synergies for retrofitting or bolting on an xF production process to an existing corn ethanol, cellulosic ethanol or corn wet milling plant that has ethanol production. The most significant are the cost savings realized from the common corn or biomass feedstock source and the 30 percent ethanol component needed for the process. Additional co-location synergies include: energy, utility services, site infrastructure, permitting, transportation and logistics, operation and maintenance labor, and coproduct utilization or marketing.



3 Questions with Bill Whitlock
Bill Whitlock   |  Featured in the panel titled:
A Sense of Where You Are: Process Control Strategies that Reduce Costs and Increase Yield
Tuesday, June 10 | 1:30 pm - 3:00 pm   |  View Panel

Senior Scientist,
Novozymes		 What would you say is the most notable difference between the InDex analytical approach and the conventional Dextrose Equivalent (DE) approach?
The DE test gives a single number that indicates the average dextrin size in a mash, but it does not tell you about the dextrin size distribution or the quantity of starch that has been solubilized in the cook process. InDex address these shortcomings by measuring three parameters simultaneously: the degree of dextrinization; the degree of starch solubilization; and the degree of glucose generation. The InDex tool accomplishes this with a standard HPLC and is less labor-intensive than a DE test.

What can the InDex methodology tell producers about the efficiency of their front end mechanical systems?
The degree of starch solubilization parameter can be used to track changes in the conversion efficiency of large particles to soluble sugars in the cook process. This is especially useful when implementing mechanical or thermal changes in the front end. The InDex parameters degree of dextrinization and degree of glucose generation can be used to control enzyme additions to maintain a consistent sugar profile out of liquefaction.

Adoption of InDex is strong across the industry but sometimes run as a companion to the incumbent DE approach? Under what conditions are producers able to adopt InDex as a total replacement for the conventional DE approach?
I see the potential for InDex to replace the DE test at all dry grind plants across the industry. It’s more about establishing a comfort level with the new technology than it is about specific plant conditions. Given time, I think most producers will find that InDex is easier to perform and more useful than the DE.



3 Questions with James Ramm
James Ramm   |  Featured in the panel titled:
How Producers Can Maximize their RIN Coproduct in a Dynamic Policy and Pathway Environment
Wednesday, June 11 | 1:30 pm - 3:00 pm   |  View Panel

Partner & Senior Engineer,
EcoEngineers		 When RFS2 took effect, ethanol producers were grandfathered in at existing production levels. Any new capacity now has to meet the GHG reduction target given in the law. What are ethanol producers doing to demonstrate capacity expansions meet that 20 percent GHG reduction target?
Ethanol producers have continued to make improvements in plant efficiency and ethanol yield. Upgrades including new grinding technology, corn oil extraction, etc. have been added to improve production efficiencies. Reductions in process energy have been secured by increasing motor efficiencies, reducing the electric load from plant lighting, and improved heating efficiencies. With these improvements in place, ethanol producers could demonstrate the 20 percent GHG reduction target and move beyond grandfathered baseline volumes and the U.S. EPA is reviewing pathway application procedures in anticipation of expansion and diversification.

For years, ethanol producers just passed along the RINs generated with their production. The RINs landscape has changed dramatically. Are ethanol producers having to make changes to meet the demands of the RINs market?
The higher value of D6 RINs has downstream parties seeking greater assurance of validity. Audits will continue to be performed as part of RIN verification and are now in demand for LCFS credit verification. Ethanol producers have for the most part said no to adoption of RIN Quality Assurance Plans under the proposed rulemaking by EPA. However, EPA’s final rule and the market will encourage adoption of a credit verification protocol.

Are there new strategies emerging to optimize the value of carbon and RIN credits generated at ethanol facilities?
Ethanol producers can optimize renewable energy credit values by continuing to increase the efficiency of renewable fuel production or co-locating additional renewable fuel production plants. Co-location of biogas, biodiesel, renewable diesel and cellulosic ethanol facilities are emerging strategies. Demonstrating lower GHG emissions or lower carbon intensity (CI) through modeling is a necessary step to increase the value of energy credits. The Greenhouse Gases, Regulated Emissions, and Energy Use in Transportation (GREET) Model developed by Argonne National Laboratory is used to support the registration of plant expansions and higher value, low CI fuels.

3 Questions with Eric Sumner
Eric Sumner   |  Featured in the panel titled:
The Forever War: Pathways Available to Ethanol Producers for Bacterial Control and their Impact on Yield and Feed Coproducts
Tuesday, June 10 | 10:30 am - Noon   |  View Panel

Global Market Development Manager,
DuPont FermaSure		 Explain why efficient and economical control of bacterial contamination “is one of the most significant and controllable areas of lost profitability today,” as you mention in your presentation abstract.
Lost efficiency due to bacteria contamination is a problem in many plants and often goes unrecognized due to low, but chronic production of organic acids from sugar. This means sugar is directed away from ethanol production and inhibits higher plant performance and efficiency. The result is lost profitability. Bacteria contamination is very much preventable by utilizing good plant hygiene and today’s advanced control methods. This is especially true when it comes to antibiotic resistant bacteria.

What are the main benefits of antibiotic-free methods?
There are a number of antibiotic-free bacteria control methods available to an ethanol producer, including DuPont’s trademarked FermaSure XL, hops extracts, etc. They allow production of antibiotic-free products which include coproducts such as distillers’ grains and solubles (DGS) and corn oil. This is becoming more and more important to downstream buyers who are looking to produce antibiotic-free products. An example of this is dried DGS bound for China, protein growers, organic markets and more. Today, we are seeing customers voicing this as a concern and a reason to move away from antibiotics. In addition, some products such as our FermaSure XL improve overall efficiency, providing greater value and often reducing batch time which increases throughput. Throughput is critically important when plants are running at stronger margin positions, as has recently been the case.

Are there any drawbacks?
Cost in use is often cited as a concern, i.e. what is this product costing me to use in my process? This is a valid concern. However, what is most important is not cost in use but value in use. Value in use looks at not just what the cost of using a product is, but also what is the benefit? That is, what is the financial return on a products cost? This can be determined by measuring the cost per gallon of ethanol produced. In addition, there are often other positive impacts that are softer and more difficult to quantify, such as less downtime, energy savings and more.



3 Questions with Henrik Maimann
Henrik Maimann   |  Featured in the panel titled:
Updates from the Field II: Reviewing the Global Race for the Successful Commercialization of Cellulosic Ethanol Production
Tuesday, June 10 | 3:30 pm - 5:00 pm   |  View Panel

Vice President,
Dong Energy		 Tell me a little bit about DONG Energy’s role in licensing Inbicon Biomass Refinery technology.
DONG Energy is a leading northern European power group with an aggressive position in reducing CO2 footprint of its energy production, focusing on northern Europe. New Bio Solutions, a fully owned subsidiary of DONG Energy Thermal Power, is a technology company which has developed its Inbicon Cellulosic Ethanol technology since 2004. Through successful operation of our industrial scale demonstration project running since 2008, it is made commercially ready for the world market. As a technology provider, we are working on a licensor basis making our unique Inbicon technology available for partners and customers enabling them to create value by producing ethanol and valuable by-products.

Give us a little taste of what’s happening in Brazil and Asia, as referenced in the title of your presentation.
While the market for commercial cellulosic ethanol production in Europe and in the USA has been very slow, for different reasons, markets like China, South East Asia and Brazil are picking up fast. China has decided a clear strategy for biofuels focusing on cellulosic ethanol production ("2G" ethanol) and our Inbicon technology is deep into designing the first-mover project with our partner. Brazil needs to increase drastically its ethanol production over the next 10 years just to make-up with the expected increase in transport fuel consumption, hence targeting cellulosic ethanol production is a key tool to meet the Brazilian demand. The availability of biomass, already on the sugar-based first generation ethanol plants, makes the cellulosic sugars actually able to match the first generation price levels, leading to a significant increase of the farm land yields. Parts of Southeast Asia have large production of biomass and even without a strong ethanol home market and governments are supporting the creation of a biomass industry.

What has been slowing the process to get steel in the ground? Have you seen that changing and how?
Technologies for production of cellulosic ethanol are new technologies and, as such, not a favorite of commercial investors and special means are required to realize the first projects. Especially it requires a clear and stable market prospect which has been absent both in the USA and in Europe. Although signals of right intentions by state—and federal government in the USA and in the European Union—are seen, it has so far been difficult to convince investors to target new projects. We do, however, see a move towards low carbon fuel standards, currently active in parts of the USA and coming to Europe, as a positive move which will most definitively result in a start of release of a series of commercial projects.



3 Questions with Jim Holland
Jim Holland   |  Featured in the panel titled:
The Track Ahead: Safely Increasing Capacity on the Nation’s Railways
Wednesday, June 11 | 1:30 pm - 3:00 pm   |  View Panel

President & CEO,
Pinnacle Engineering		 Pinnacle Engineering specializes in industrial and railroad services, and has helped some of its railroad clients respond to derailments of hazardous materials. Are the regulatory responses to the recent high-profile derailments with Bakken crude going to impact ethanol industry shipments as well?
In recent years, crude oil shipments have surpassed ethanol as the number one hazardous material shipped on rail. First of all, derailments are rare events. The vast majority of shipments are delivered without incident. That being said, history has shown that high-profile incidents may result in a variety of regulatory responses, both large and small. In preparation for increased regulatory scrutiny or regulatory changes, the rail industry, and industrial facilities like ethanol production facilities, should review their preparedness plans and employee training to ensure that they meet or exceed current regulatory expectations.

You recently assisted the RFA in preparing the updated “Guideline for Release Prevention & Impact Mitigation” for the fuel ethanol industry. How do crude oil releases differ from ethanol releases?
From an environmental response perspective, the biggest difference between ethanol and hydrocarbon fuels is the water solubility. Unlike hydrocarbon fuels, ethanol is water-soluble. The solubility of ethanol in water means that if a release reaches surface water, the ethanol will rapidly disperse and can no longer be recovered as a product. Ethanol in surface water will rapidly biodegrade and the resulting depletion of dissolved oxygen caused by the biodegradation will impact fish and aquatic organisms. That’s just one of a number of differences between ethanol and hydrocarbon fuels. I’d recommend that all plant personnel responsible for contingency planning and response review the updated Guidelines to assist them with understanding how to prevent releases and to prepare for potential incidents.

You’ll be talking at FEW about preparing contingency plans. What are a few elements ethanol producers need to consider in developing their contingency plans?
A) Know your site. Know the hazards of your process and the triggers that could initiate an incident. Know the unique geography of your site, like nearby surface water location and soil types.

B) Design and plan effective actions that will mitigate the impact of potential incidents.

C) Train. Practice facility actions to respond to real world situations. Tailoring training activities to focus only on unlikely events is almost as bad as no training at all. A well planned, practical field exercise is an excellent way to evaluate your readiness. Drills are extremely useful for identifying additional training needs, contractor issues, engineering weaknesses, and in gaining new ideas or insight from your local responders.

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