Nation’s Unveiling of First Dual Bio-Fuels Station

28 11 2011

Raleigh, North Carolina, pocketed the nation’s first milestone last week with the unveiling of the first station that offers both E85 (a fuel blend that contains 85% ethanol and 15% petrol) along with B20 (a fuel blend that contains 20% bio-diesel and 80% diesel). 

This milestone brings to light a key concern in the transformation of our transportation fleet. Many consumers are worried about. Fuel stations continue to proliferate throughout the States. Illinois, for example, has 200 to 300 E85 fueling stations across the state. The Department of Energy offers a routinely updated map and categorical list of locations including the address, hours of access and map.

Moreover, Illinois is pioneering the implementation of ethanol blender pumps. 

 

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Making the Case for Clean Fuels with Economic Principles.

25 11 2011

So I thought I might run through a brief lesson of what I have learned in higher education and how those principles apply to our everyday world. I graduated with a B.S. in Renewable Energy Economics and Policy, and I’m currently pursing a masters in Environmental Policy at the University of Michigan.

But this post is not about me. It’s about markets and how they function.

To set the tone, here’s some background etymology. Economics’ root word, eco, is derived from the Greek word Oikos–meaning household or family. Economics literally translates into “management of the household.”

In order for any family unit to properly function, certain rules are established in a home. Example: dirty dishes must be placed in the dishwasher or cleaned properly when used so the next user doesn’t have to do so.  If not, extra chores might be assigned.  Although this analogy might be a stretch similar protocol applies to markets.

Markets typically act as a mechanism to facilitate transactions between buyers and sellers while offering perfect information.  Not all markets are created equally (some have many producers and are more perfectly competitive, while others act as monopolies with one buyer that exhibits significant market share).  All markets, however, can generate costs or benefits that are not taken into account within the routine transactions.  These costs and benefits can be placed on others not directly involved, making them pay or succeed just by being a by-stander.  These costs and benefits I’m referring to are called externalities.

There are two types of externalities–positive and negative. The typical example of a positive externality is clean air (e.g. someone that cleans up the air can make society and ecosystems better off); the typical example of a negative externality is pollution (e.g. a firm placing the cost of clean-up or health-care onto society as a result of their manufacturing).

Externalities, Economics,

Economics informs us that the presence of negative externalities merits government intervention because that particular market has failed to function properly.  These intervention mechanisms can include anything from a tax to thorough monitoring to other policies.

Most people would cringe at the thought of more government. I happen to agree. As a firm believer in the free market, I would also like to see less government intervention. How do we enable that? The answer is fairly intuitive–use fuels that inherently don’t require firms to internalize the cost for cleanup because the pollution is not an issue in the first place.

Fuels grown here in America such as ethanol and bio-diesel do not contribute to smog or air pollution. Therefore, they do not result in externalities that must be internalized.

It’s about time we start getting back to the academic principles to point us in a better direction of where we need to head as a society.





Isolated Hard Times: Ethanol’s Job and Economic Outlook Remain Strong

19 11 2011

We are reminded of it everytime we turn on the media. It’s a ubiquitous reminder that jobs are scarce, budgets strained, and spending frugal.

Yet the question remains – are all sectors truely created equal in terms of our recent macroeconomic trough? I was curious to see the impact within the renewable fuels arena, a major employer and source of American fuel, so I tracked down some statistics and facts to paint a clearer picture.

According to the Minnesota Department of Agriculture’s 2010 Minnesota Annual Report, “Minnesota’s ethanol industry generated more than $2.5 billion in economic activity in 2009 and supported more than 6,800 jobs … Ethanol production in the state increased to 862 million gallons in 2009 from 550 million gallons five years ago.  The MDA report estimates the industry is on tap to increase production to 1.1 billion gallons this year with a projected economic impact of $3.1 billion and approximately 1,500 additional jobs.”

Minnesota also boasts 21 ethanol plants across the state, all providing economic opportunities for suffering rural economies.

Minnesota Department of Agriculture

In order to determine the significance of that figure and ethanol’s efficacy in providing employment opportunities, I thought it imperative to compare it to the unemployment data for Minnesota. As of October, Minnesota’s unemployment rate fell to 6.4% while the national unemployment fell to 9%, according to the Minnesota Department of Employment and Economic Development.

All other factors aside, it seems no coincidence that Minnesota is much better off than most of the country in this recession. A state-wide statute has set the goal for increasing the ethanol blend in fuel to 20% by 2013, and they also offer  more E85 pump stations than any other state in the nation.

These regulatory initiatives in addition to renewable fuel industry proliferation have proved to be the successful dual pillars that continue to drive Minnesota’s economic development agenda.

 

 





Research Award: Corn Ethanol’s Positive Role in Health and Medical Arenas

14 11 2011

Ethanol, University of Illinois, bioplastic, corn oilDr. Munir Cheryan will be lauded this Tuesday with an ethanol award for his modern advances in the arena of ethanol production.  Research professor at University of Illinois’ Agriculture Bioprocess Laboratory, he continues to license more patents and works alongside Prairie Gold, Inc. since 2006 toward the commercialization of high-value ethanol by-products.

corn ethanol, Illinois, University of Illinois

I called Dr. Cheryan earlier today to garner a further insight into his accomplishments and breakthroughs. Although I will not delve into every shared detail, the main takeaways hold enough magnitude to stand on their own.

Dr. Cheryan’s research ramped up in the 1980s because he wanted to be a part of solution to clean air, reduce pipe emissions and enable a farm support program. Until this time, ethanol production was a costly, time-intensive process that, in his words, relied on “moonshine technology.”  His research and breakthroughs helped augment the time efficacy of ethanol production and brought it from 100 hours down to 24 hours or less by improving the separation process.

In the ‘90s he helped improve the energy ratio for ethanol production by the application of membrane technology in several areas of corn processing. A key driver for efficiency improvement was to drive costs down for ethanol production; Dr. Cheryan saw this market signal’s solution was to seek out higher valued co-products from corn that can co-exist with ethanol. Zein, one of four proteins found in maize, touts a whole suite of applications and can be extracted from the corn without reducing yield of the ethanol end-product; this protein is natural, biodegradable and can be used in agriculture (hay baling), in the manufacturing of plastics, food products (a non-stick, biodegradable chewing gum) and in biomedical markets (for medical sutures that safely dissolve in the body).

An accidental co-product discovered from zein extraction demonstrated corn’s ability, after ethanol production, to offer additional benefits to, this time, the health market. Dr. Cheryan explained to me that the compounds, lutein and zeaxanthin, which make corn yellow in color (same for Marigold flowers!) also contribute significantly to retina and cardiovascular health while preventing age-related macular degeneration, or AMD. He envisions a future opportunity to sell the crude material to vitamin companies.

Another coproduct from his technology is a “healthy” corn oil containing much higher levels of health-promoting compounds than conventional corn oil. A unique feature of all Dr. Cheryan’s processes is that corn-based ethanol is used instead of petroleum-based solvents.

Key takeaway: Dr. Cheryan’s devotion will help ethanol stand on its own in a competitive market saturated with petroleum-based products while improving the quality of our air and health.





Abengoa: Jack of All Trades

12 11 2011

Abengoa Bioenergy‘s new 23 million-gallon refinery will take biomass feedstocks, such as switchgrass, and generate ethanol for the production of homegrown fuel.  Having already successfully test-driven pilot plants of the same technology, Abengoa is working to extract more useful material from grain and cereal tailings in the form of residual starch.  These residual starches are generally 5% of the entire starch levels in cereals and grains and can be as high as 10%, according to Abengoa Bioenergy.

So, what does this mean for the biofuel/ethanol industry?  More extractable starch = more ethanol.  Abengoa estimates theoretically one could obtain 3.2 gallons of ethanol per bushel of corn.  However, through efficiency losses in the starch extraction processes of current ethanol facilities, the common producer gets 2.6 gallons on average.  With Abengoa’s new technology, we could see this average raise to 2.9 gallons per bushel.  That is about a 10% gain.

Abengoa is also advancing in the study of ethanol co-products.  Primarily, distillers dry grains and solubles or DDGS are of hot topic in the industry.  At the moment, DDGS are mostly given to rumenoids because of their high vegetable content, but Abengoa is working to supplement these co-products and create feeds that are more suitable for poultry and pork stock.  This is done by concentrating the proteins in the DDGS.  This means less waste will come from the ethanol production process, and more money is to be made.

Switchgrass, bioenergy, Abegonea, cellulosic ethanol(Photo)

Lastly, but not least, as if Abengoa didn’t have all of the bases covered already, they are also improving the efficiency of cellulosic ethanol production.  Cellulose, by nature, is much harder to break down than starch and requires the addition of special enzymes in the processing phase.  These enzymes are expensive to create and relatively large doses are needed to bread down the cellulose.  Abengoa is currently studying to increase the effectiveness of these enzymes while driving the cost to produce them down as well.  In other words, a smaller dose will have the same impact as a current dose and will cost less to make.

Quick recap: Abengoa sounds like the Westinghouse of ethanol.  They didn’t start it, but they are sure bringing the best out in it (ethanol in Abengoa’s case, electricity in Westinghouse’s).  They are increasing ethanol yields per bushel by unlocking residual starches; they are expanding the usefulness of DDGS as a feedstock not only for cattle but for pigs and chickens; and they are increasing the efficiency of breaking down cellulose so it can be used to make more ethanol.

Bravo, Abengoa! Bravo!  You get two cobs up!





Forget hydrofracking: Think Corn Fractionation!

4 11 2011

I’ll be upfront and honest, as always. I had no idea what corn fractionation was until 10 minutes ago. So, chances are that you’re almost as uniformed as me concerning this topic.

I came across a news release from Southern Illinois University in Edwardsville lauding the University’s new mulit-million dollar equipment upgrade and partnership with Cereal Process Technologies. The Illinois Department of Commerce and Economic Opportunity also offered a $3.5 million capital grant to SIUE’s National Corn-to-Ethanol Research Center.

(Photo)National Corn-to-Ethanol Research Center, SIUE, ethanol

Back to fractionation. According to the National Corn-to-Ethanol Research Center’s director, John Caupert, corn fractionation is a process which ” the corn kernel is separated from its fibrous husk, the starchy portion and the oil.”  The goals of this process are twofold: improve efficiency of conversion and drive down the costs associated with this intensive process. By increasing efficiency and driving down costs, they are also researching ways in which left-0ver material from corn fractionation can be utilized in tertiary processes to make useful corn-derived byproducts. (Photo)BioEnergy Research, corn ethanol tube

Why should we care? According to Cereal Process Technologies, corn fractionation is the next modern step in reducing the energy inputs needed in the ethanol process and augmenting the energy return on investment through ethanol conversion. As we’ve already learned from Argonne National Laboratory, ethanol does have a positive energy return.

And these researchers are looking to drive that return up as much as possible.