America is addicted to oil.
 
 Yes, the defining catchphrase of President Bush's 2006 State of the Union address is a direct reference to America's voracious appetite for transportation fuels—gas and diesel in particular—and not a reference to the nation's heavy reliance on fossil fuels to meet its power, heat and electricity needs. But even the strongest ethanol advocates can't help but see a bit of irony in the fact that even the production of ethanol requires the burning of hydrocarbons. So while the nation may be addicted to oil, the results of an industry-wide survey conducted by Ethanol Producer Magazine suggest that the U.S. ethanol industry is somewhat hamstrung by its own dependence on natural gas.
 
 The survey results depict an industry willing to change, and scanning the horizon for viable alternatives. 
 
 While the results of EPM's inaugural 2006 Ethanol Plant Power Survey isn't likely to shock many ethanol insiders, it does reinforce what energy experts already know about the evolving business of ethanol production. First, the survey results clearly illustrate that a growing number of U.S. producers are very concerned about the price volatility and overall direction of natural gas—the industry's primary process heat and steam feedstock. Secondly, representatives of nearly every ethanol plant or future ethanol plant contacted by EPM indicated that they are working to either reduce their energy consumption or produce ethanol more efficiently. Of course, no two plants have exactly the same priorities, and some companies are simply more proactive than others when it comes to energy. Some producers are utilizing ingenious solutions to ease—if not eliminate—their reliance on natural gas, while others are charting a more traditional course, and hoping for the best. 
 
 The Results
 The information revealed in the survey essentially confirms the obvious—natural gas is the proven leader for process heat and steam production. However, the figures did reveal a few interesting notes. 
 

 Here are the numbers EPM worked with: Out of 97 possible operating ethanol plants, 43 responded to the survey. A majority—39—rely solely on natural gas for steam and thermal energy. Two plants feature a "dual-fuel" system using both natural gas and coal in separate boiler systems. Of the remaining two plants, one strictly uses coal while the other says it uses a natural gas and electricity mix to power the plant.
 
 It should be noted that while all of the respondents show a reliance on fossil fuels, several facilities are in the process of adding biomass gasification systems, which are expected to eliminate the need for fossil fuels.
 
 Of the 34 plants under construction when the survey was conducted, 17 responded. Of those, a majority—11—plan on using natural gas. Four plants say coal will be the primary energy source. One plant plans on using the "dual-fuel" system of natural gas and coal. Finally, one plant says it will use a biogas created through cattle manure feedstock from a nearby feedlot to power its facility.
 
 While more respondents would have given a clearer picture of the entire industry, the results do provide an accurate snapshot of energy usage in ethanol facilities nationwide.
 
 Trending Away from Natural Gas
 Is there really a discernable move away from natural gas? While there certainly is plenty of talk about it, the action doesn't necessarily live up to the hype. Some plants, such as Red Trail Energy in Richardton, N.D., are being sited not according to their proximity to corn, but energy supply. Red Trail has long-term lignite coal contracts in place, making it an easy decision to build farther away from massive corn supplies. That approach could pay off, especially if imported liquefied natural gas (LNG) continues its slow crawl to the energy marketplace.
 
 The fact remains, when considering all of the logistical issues ethanol projects face, natural gas continues—and likely will continue—to be the cheapest energy source per Btu for ethanol plants. The overall instability of the natural gas market is the likely root of considering other sources. After all, coal is extremely abundant in the western United States.
 
 There are other advantages to coal besides stable prices. It also offers producers flexibility. Lincolnway Energy, a 50 MMgy ethanol plant under construction in Nevada, Iowa, will utilize dual boilers to power its plant. The boilers will primarily operate on coal with a propane backup. Since coal-fired plants require intensive annual maintenance, dual boilers allow the facility to maintain as much uptime as possible.
 
 Lima, Ohio-based Greater Ohio Ethanol will be another coal-fired facility. However, the boilers can also run off other materials, according to President Greg Kruger. Petroleum coke or waste material from the automotive industry might also be used. The facility will not use a thermal oxidizer, instead utilizing a bioscrubber that eliminates volatile organic compounds. In this process, materials are consumed as in a digester, which takes little power to run.

 
 Heron Lake Bioenergy in Heron Lake, Minn., will use Wyoming Powder River Basin Coal as its process heat and steam fuel source. The facility has the ability to use propane as a starter source or backup source in times of maintenance.
 
 EPM has also learned of proposed ethanol plants that intend to utilize coal and/or coal fines. Just south of Canton, Ill., for example, Central Illinois Energy recently announced that construction will soon begin on a 37 MMgy plant that will use 100,000 tons of Illinois coal fines from mining operations. Company officials say there is a 30-year supply of coal fines within 12 miles of the proposed facility. Coal fines are lower in Btu's than regular coal, but still provide efficient power, company officials say. 
 
 Other facilities are using—or will use—coal and natural gas, both of which stand to provide even more energy flexibility.
 
 Capitalizing on Dual-Fuel Flexibility
 Chief Ethanol Fuels and Alchem LLP are two older plants perhaps ahead of their time. Chief Ethanol was brought on line in Hastings, Neb., in 1985. Alchem started up in Grafton, N.D., five years later. Both facilities utilize a dual-fuel system capable of burning coal or natural gas. Separate boilers allow the plants to burn each energy source simultaneously if needed. 
 
 Chief Ethanol's Duane Kristensen says his plant was originally equipped with a Zurn Industries-designed coal-fired boiler. Now the facility uses the natural gas and coal systems continuously, except in cases of maintenance. An advantage with that is when one boiler is taken off line for annual inspections, the other boiler can remain running to operate the plant. "We very seldom shut down cold," Kristensen says. The past winter, when natural gas prices spiked over $15 per MMBtu, Chief Ethanol maximized coal usage.
 
 Alchem has a similar system. However, approximately one year ago, they switched to 100 percent coal. The plant initially had the capability to run on propane.
 
 Winnebago, Minn.-based Corn Plus puts another spin on the dual-fuel idea. The 44 MMgy facility utilizes a fluidized bed reactor, which burns syrup that normally is applied to distillers grains. This provides energy for the ethanol production process. Natural gas is still used to fire the boiler used to dry distillers grains. 
 

 Biomass and Other Possibilities
 Not since the 1950s, when petroleum passed coal as the nation's leading fuel source, has the United States been poised for another major switch in energy. With crude oil prices reaching for the sky, that is beginning to change. Undoubtedly, fuel ethanol is at the leading edge of that change.
 
 Likewise, ethanol producers are looking for a switch in their energy. One of the knocks on ethanol production is that it takes a large quantity of nonrenewable fossil fuels to create the product. Biomass is playing a distinct role in changing this dynamic. 
 
 Chippewa Valley Ethanol Co. in Benson Minn., currently burns natural gas with a propane backup supply. However, the plant is currently transitioning to a biomass gasification system, which should start up this coming winter. The timing couldn't be better since natural gas prices typical curve upward during the winter months.
 
 Another Minnesota plant, Central Minnesota Ethanol, hopes to relegate natural gas as its backup process energy source once its wood waste gasification system begins operating this summer. The plant's gasifier will also be capable of burning distillers grains and syrup if market conditions dictate. 
 
 Burning distillers grains, while appalling to some, is certainly becoming more appealing to some producers. Prairie Horizon Agri-Energy, under construction in Phillipsburg, Kan., is considering it. Many plants, such as Golden Triangle Energy, only sell distillers wet grains. It's a relatively simple way of saving money on energy costs if the plant is located near a cattle feedlot.
 
 However, at the Biodiesel Opportunities and Investment Summit held April 27-28 in St. Louis, a well-known ethanol financing expert said some large cattle farmers have begun receiving free distillers grains in some areas near U.S. ethanol plants. EPM was unable to corroborate that claim by press time. 
 
 Another plant considering biomass-fired options is Commonwealth Agri-Energy in Hopkinsville, Ky. General Manager Mick Henderson tells EPM the options of burning wood, wheat straw or corn stover are always under consideration. He says "anything with one year payback or less, as long as it's not more than $1 million" would likely be implemented sooner rather than later. 
 
 Henderson suggested that plants using biomass for energy are also setting themselves up for the eventual move to cellulose ethanol. The handling infrastructure and feedstock contracts will already be in place.

 
 Other producers are keeping a close eye on the actions. "We will be monitoring opportunities for replacement or reduction of natural gas through a number of different processes, and will be closely monitoring the gasification processes in the industry," says Mitch Miller, Central Indiana Ethanol general Manager.
 
 Biogas is another biomass-related opportunity being considered to lessen fossil-fuel dependence. Nebraska BioClean, under construction in Mead, Neb., will use cattle manure from an on-site feedlot to produce methane biogas to power the plant. The distillers wet grains will then be fed directly to the cattle in a closed-loop system.
 
 Cogeneration and Coal-Plant Synergies
 Most of the plants EPM talked with expressed interest in cogeneration, or combined heat and power (CHP), capabilities. For many plants, however, the cost of cogeneration equipment just isn't feasible. Facilities located in public power areas providing cheap electricity just don't have the incentive to spend the capital needed for cogen.
 
 Other facilities in higher-cost electricity areas are seriously considering it. "We are actively pursuing the combined heat and power facility, and we could eventually switch away from natural gas," says Greater Ohio's Kruger.
 
 Prairie Horizon expects to generate up to 2 megawatts of electricity with both high- and low-pressure steam turbines. Lena, Ill.-based Adkins Energy recovers waste heat from the steam produced by its on-site, natural-gas-powered generator. 
 
 Northeast Missouri Grain, which uses propane as a backup to its natural gas supply, also utilizes a gas-fired turbine generator for cogeneration purposes. The turbine is a joint venture with the city of Macon, Mo.
 
 U.S. Energy Partners has a similar joint CHP concept in Russell, Kan. The town operates a power plant with natural gas-powered turbines. The unit produces steam from excess heat, which the ethanol facility utilizes. This synergy is becoming feasible on a larger scale with other ethanol projects.
 

 For years, Northern Lights Ethanol in Big Stone City, S.D., has utilized excess steam from the coal-powered Big Stone Power Plant. When initiated, the synergy fulfills nearly two-thirds of Northern Lights' steam needs. Blue Flint Ethanol, under construction near Underwood, N.D., is undergoing a similar project.
 
 Kankakee Renewable Energy LLC, a proposed 50 MMgy ethanol plant in Kankakee, Ill., would generate process steam and about 50 percent of the electricity required for ethanol production. Like many ethanol plants, the facility would include a waste-heat-recovery/
 steam-generation-thermal-oxidizer package proven to minimize emissions and improve energy efficiency. Interestingly, the facility would be powered by coal fines and wood waste—and later by methane from a local landfill. The investors behind the project say the proposed plant's energy cost would approximate 45 percent of a similarly sized plant running on natural gas and electricity from the grid. 
 
 Understandably, most survey respondents said such a setup would be more than ideal. However, the feasibility of similar cogeneration projects is taken on a case-by-case basis.
 
 One hundred percent of the plants responding to the survey had taken, or were taking, simple steps to reduce energy consumption, such as frequent maintenance, adding tank and pipe insulation, and reducing the length of piping.
 
 Other facilities are taking advantage of unique process changes that reduce energy. Many plants managed by Broin Management LLC are saving energy through the Broin Project X (BPX) raw-starch cook process. Pro-Corn LLC of Preston, Minn., is currently implementing the BPX process through an expansion project that should be completed this fall.
 So while the results of EPM's survey may, indicate a significant reliance on natural gas, its apparent things are beginning to change. Seeing natural gas at $15—and believing in a consistent renewable message—tends to do that. While changes may be slow in nature, they are definitely on the horizon. EP
 
 Dave Nilles is an Ethanol Producer Magazine staff writer. Reach him at <a href=mailto:"dnilles@bbibiofuels.com">dnilles@bbibiofuels.com</a> or (701) 373-0636.

NYMEX Natural Gas Futures April '05 to April '06

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Chippewa Valley Ethanol Co. in Benson, Minn., is currently transitioning to a biomass gasification system.

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U.S. Energy Partners in Russell, Kan., is well known for its successful cogeneration system.

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In a non-scientific survey of U.S. ethanol plants, EPM essentially reaffirmed what most industry professionals already knew about ethanol plant power sources. The U.S. ethanol industry is still heavily reliant on natural gas, but perhaps on the precipice of kicking the habit … even if coal is one of the remedies.

Process Heat and Steam Alternatives Rising

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