FEW: Corn oil, diversity on industry's mind

By Dave Nilles | June 02, 2008
Web exclusive posted June 16, 2008 at 11:02 p.m. CST

The U.S. fuel ethanol industry continues to grow. As it does, it searches for ways to diversify its product line while lessening risk. With corn prices spiking and an uncertain near-term future on the horizon, it's becoming more common to hear companies in the ethanol industry discuss corn-oil extraction.

Several companies attending the 24th International Fuel Ethanol Workshop & Expo in Nashville, Tenn., were touting corn-oil extraction during the welcome reception and expo grand opening. These follow perhaps the highest-profile corn-oil announcement from VeraSun Energy Corp., which held a groundbreaking ceremony for its extraction project in April. The publicly traded company is implementing a back-end corn-oil technology at its 120 MMgy facility in Aurora, S.D. VeraSun, which began considering corn-oil technology as early as 2004, expects to produce 8 MMgy to 9 MMgy of corn oil from the plant, leaving 360,000 tons of what it terms corn distillers meal.

VeraSun's Keith Bruinsma, vice president for corporate development who oversees the company's oil-extraction process, said the company anticipates operation of the corn-oil technology, which is being provided by Crown Iron Works Co., to begin in the fourth quarter of 2008.

Alpharetta, Ga.-based GreenShift Corp. was touting its corn-oil extraction technology at the FEW. GreenShift's David Cantrell said the company's patent-pending technology is in place at four ethanol plants, while others are under discussion. Little Sioux Corn Processors, a 50 MMgy plant in Marcus, Iowa, began using GreenShift's technology in the spring of 2006. Utica Energy LLC in Oshkosh, Wis., began using it in the spring of 2007. Its corn oil is being processed at a biodiesel plant in Adrian, Mich., according to GreenShift's Web site.

Finally, Western New York Energy LLC in Median, N.Y., is the latest facility to use GreenShift's technology. It began extracting corn oil in February.

Biodiesel companies are eager to consider corn oil as a potential feedstock. Soy oil prices have ramped up considerably in recent years, pushing biodiesel's break-even price at or above that of diesel fuel. Brad Albin of Renewable Energy Group Inc., an Ames, Iowa-based biodiesel development and management company, recently told EPM that with greater than 8 billion gallons of ethanol production per year, approximately 800 million gallons of corn oil is potentially available for biodiesel production.

However, corn oil obtained from ethanol plants, particularly from back-end extraction, poses several challenges to biodiesel producers. The corn oil contains moisture and solids, as well as elevated free-fatty-acid levels. Unlike many other oil sources, corn oil from ethanol plants also contains waxy compounds and sterols. Albin said REG has three plants currently using corn oil from ethanol facilities. The company uses pretreatment technology to overcome corn oil's challenges. Cantrell also told EPM that GreenShift's biodiesel technology can handle corn oil's high free-fatty-acid content.