Corn oil extraction grows in popularity

In the nearly two years since I came back to work for Ethanol Producer Magazine, I’ve been hearing more and more about plants installing corn oil extraction technologies. Notably, two of the companies on the top four ethanol producers list—Valero Renewable Fuels, No. 3, and Green Plains Renewable Energy Inc., No. 4—have both turned to corn oil extraction for additional sources of revenue.

GPRE first announced it would add corn oil extraction last summer. At the time, GPRE owned six ethanol plants. Today, the company owns nine ethanol plants with a combined capacity of 740 MMgy—all of which are extracting corn oil.

Valero entered the corn oil game in late September. The company, which operates 10 ethanol plants with a combined capacity of 1,110 MMgy, plans to add the technology to four of its plants by spring. Valero has also left the door open to corn oil at another five dry mill ethanol plants, saying it will “study the possibility” after instillation at the first four plants is complete.

Besides those larger companies, we know there are other ethanol plants already extracting corn oil or considering it. With tight margins, the idea of adding an additional salable product to ethanol and distillers grains is an attractive one. When it planned to add corn oil extraction to six of its ethanol plants GPRE said it expected to bring in an additional $15 to $19 million with the technology. Valero noted that it’s a low cost undertaking with an expected payback in less than two years.

Recently, I started to wonder, what markets is that corn oil being sold into? Are there ethanol plants leaping through the necessary hoops to produce high-grade corn oil for human consumption? Is it correct to assume that most corn oil is being sold into animal markets or shipped to biodiesel plants?

One intriguing idea that, so far, nobody has actually done yet, is to co-locate a biodiesel plant with an ethanol plant producing corn oil. The product can then, of course, be used as the feedstock to produce biodiesel. There are a couple companies talking about the idea, but that I know of, nobody has actually made this a reality.

My next feature for Ethanol Producer Magazine will delve into these questions, focusing on corn oil as a feedstock for biodiesel production. Mainly, is it feasible for ethanol producers to build on-site biodiesel plants, thereby creating an additional revenue-producing product from a feedstock produced on site? Who are the major players working on making this a reality? Are there corn oil producers out there that feel that delving into biodiesel production wouldn’t be a good idea? If so, why?

I’m actively looking for people to interview for my story in the next few weeks. If you or somebody you know would be a good person to interview on this subject, please let me know as soon as possible. Send me an email at hjessen@bbiinternational.com or call me at (701) 738-4946.

If, on the other hand, you have the same questions as the ones I’ve posed here, you’ll just have to watch for my article in an upcoming issue of Ethanol Producer Magazine.