FEW: Ethanol 101 seminar covers a little of everything

By Kris Bevill | June 02, 2008
Web exclusive posted June 16, 2008 at 11:07 p.m. CST

As a precursor to the official start of the 2008 International Fuel Ethanol Workshop & Expo, attendees had the option of taking in the Ethanol 101 seminar. Approximately 200 people attended and heard from a wide variety of speakers.

The seminar began with an overview of preconstruction aspects of ethanol plant development, delivered by Todd Mestepey, senior project manager of construction for ICM Inc. His most important tip to audience members was to be sure to establish a well-defined scope that clearly identifies the duties of all parties involved in the preconstruction process.

Casey Whelan, vice president of strategic initiatives at U.S. Energy Services Inc., commented during his presentation that he was pleasantly surprised to see so many people at the seminar despite all the recent bad press that ethanol has been receiving. A show of hands, however, confirmed that almost all of the people in attendance were associated with companies already servicing ethanol plants, as opposed to constructing new facilities.

The most popular presentation of the day was delivered just after lunch by Mark Holtzapple, a professor at Texas A&M University. His presentation, titled "Carboxylate Platform: The MixAlco Process," might have seemed a bit advanced for an audience presumed to be new to the industry, but the line for questions after he left the stage proved that people were interested in hearing more about the process. The MixAlco Process consists of building a large pile of biomass, pretreating it with a combination of lime and air to remove the lignins, and then utilizing a carboxylate method to produce fuel. The fuel produced in this case is gasoline, rather than ethanol. According to Holtzapple, research on the process began in 1991. Currently, a semi-works plant is under construction in Bryan, Texas, and should be operational in September. The plant will be capable of producing 300 to 400 gallons of gasoline per day. Holtzapple told the audience that "you can talk about and talk about, but until you build the plant to prove it works, no one will believe you."

The price of corn was not overlooked during the seminar. Several speakers addressed the growing concern of high-priced corn and recent bad weather in the Midwest as prime examples of the volatility of the ethanol market. Risk management was a popular topic because of those factors, as well. Jason Sagebiel, risk management consultant at FCStone, announced that corn traded for $8 per bushel June 15, and he continued to stress that the biggest risk in ethanol production is the margin. He said the huge swings in profits and losses are typical in the ethanol industry.

Kenneth Ayers, managing director at Aon Environmental Services Group, presented the environmental risks to be considered when planning a biofuels plant, as well as environmental insurance. Two types of new environmental insurances he mentioned were project efficacy insurance and carbon credits/offsets insurance. Project efficacy insurance is a policy that will pay for a company to tweak its process in the beginning phase to help insure an actual start-up. Carbon credits/offsets insurance protects a policyholder if carbon credits are either not produced as promised or delivered by the seller as promised.

Other speakers at the seminar included Kent Herbst, ethanol team leader of U.S. Water Services; Angela Ronayne, project manager of Natural Resource Group; Kyle Althoff, project analyst for BBI International Inc.; James Broghammer, president of Pacesetter Management Group; James Heath, head of U.S. research and development at EcoSecurities LLC; Mark Yancey, vice president of project development for BBI International; and Neal Jakel, DST program manager of Delta-T Corp.