Friday, May 08, 2009
Biofuels vs. Biomass Electricity
Findings show that turning biomass into electricity is more beneficial than turning it into transportation fuels.
By Tyler Hamilton
BIOFUELS VS BOIMASS ELECTRICITY
May 26th, 2009Antibiotics Big Concern for MN Ethanol Producers
May 10th, 2009Antibiotics pose concern for MN ethanol
producers
By MARK STEIL , 04.04.09, 02:35 PM EDT
Ethanol’s main by-product, which is sold as livestock feed, has raised
potential food
safety concerns.
Several studies have linked the byproduct, known as distillers grain, to
elevated rates of E. coli in cattle. And now, distillers grain is facing
further scrutiny because the
Food and Drug Administration has found that it often contains
antibiotics left over from making ethanol.
Ethanol production relies on enzymes, yeast and sugar to convert corn
into fuel. And just as the wrong bacteria in the body can sicken people,
it can also cause a variety of ailments in a batch of ethanol.
Mark von Keitz with the University of Minnesota’s Biotechnology Institute
said in ethanol production, the main enemy is a bacterial bug that makes
lactic acid.
“What these organisms do is they also compete with the yeast for the
sugar,” said von Keitz. “But instead of making alcohol, they
make primarily lactic acid.”
If enough of the bacteria are present, von Keitz said fermentation can be
ruined.
“It gets acidified to the point that the yeast is no longer able to
properly produce ethanol, and then you’re stuck with a big batch of corn
mash,” said von Keitz.
If that happens, there’s no ethanol and no profit. To prevent the
problem, producers rely on medicine.
“What people operating these plants are trying to do is to keep
these lactic acid bacteria in check,” said von Keitz. “And one
way of doing that is with the help of antibiotics.”
Ethanol producers use penicillin and a popular antibiotic called
virginiamycin to kill bacteria. And that raises two potential
concerns.
One is that these treatments might promote the growth of bacteria that
are resistant to antibiotics. The development of these
“superbugs” is a major concern in
health care because
they reduce the effectiveness of medicines.
Von Keitz found some bacteria that were, in fact, resistant when he
sampled bacteria at four Midwest ethanol plants several years
ago.
The second concern is that the antibiotics could find their way to humans
through the food chain.
The
U.S. Food and Drug Administration has taken a mostly hands-off
approach to the use of antibiotics in the ethanol industry. But amid
increasing concerns over food safety in recent years, the agency is
taking a closer look.
“A year ago we put a survey out to the FDA field people to collect
samples of those distillers grains, and start analyzing for antibiotic
residues,” said Linda Benjamin, a chemist with the FDA’s Center of
Veterinary Medicine.
Samples were requested from 60 ethanol plants, including some in
Minnesota. She said testing showed that many contained antibiotics,
mainly four types.
“Penicillin, virginiamycin, erythromycin and tylosin,” said
Benjamin.
At this point the story gets murky. Benjamin won’t say if any of the
antibiotics exceeded federal guidelines.
Those guidelines are part of the problem; they’re a patchwork and far
from definitive on what levels of antibiotics in distillers grain are
safe.
If the FDA decides to restrict antibiotics in the ethanol industry, it
could have far-reaching consequences.
Distillers grain is a major source of low-cost livestock feed. Any
restrictions on its sale and use as feed will hurt the profit-scarce
ethanol industry and the livestock farmers who rely on it.
Charlie Staff, executive director of the Distillers Grain Technology
Council, said distillers grain is one of the few dependable moneymakers
left for the ethanol industry.
“If they didn’t have distillers grain as a revenue, many more of
them wouldn’t be able to operate,” said Staff.
Meanwhile the regulatory process continues to play out. The FDA will test
more distillers grain samples, and expects to issue a final report this
summer.
The maker of virginiamycin declined to comment, but the company is
expected to ask the FDA to approve the antibiotic as a human food
additive.
Depending on how this regulatory battle winds up, it could change the way
Minnesota’s 18 ethanol plants distill their product.
Copyright 2009 Associated Press. All rights reserved. This material
may not be published broadcast, rewritten, or redistributed
Biofuel Production Threatens Water Supplies
May 10th, 2009Click on this link and read this story on WASTING our precious potable water supply!
Farmer Says Ethanol Producers Back Stabbers
March 14th, 2009Click here to read and listen to Minnesota Public Radio story out of Janesville MN.
http://minnesota.publicradio.org/display/web/2009/03/12/ethanolbust/
Profits Tenuous – Ethanol Maker Forages Ahead
February 19th, 2009Though ‘profit situation is tenuous,’ ethanol maker Lincolnway forges ahead
* Nevada, Ia. - Rick Brehm, president of the Lincolnway Energy plant west of Nevada, isn’t one to sugarcoat the current economic environment for ethanol.
“Our profit situation is tenuous,” said Brehm of Lincolnway, which is owned primarily by farmers and the Heart of Iowa Cooperative, which is adjacent to Lincolnway’s 55 million-gallon plant.
Independent studies of ethanol operations by Iowa State University show that profitability for the industry vanished by December 2008 and isn’t likely to return soon unless ethanol prices improve. Brehm also notes that ethanol is a new industry struggling through growing pains, and it needs to become more efficient
“An oil company can move its product by pipeline from Houston to New York City for 3 cents per gallon,” Brehm said. “We have to pay 19 cents per gallon to ship ethanol to New York City by rail.”Companies are trying to build a 1,700-mile ethanol pipeline from Iowa to the East Coast, one example of the efficiencies needed.
“The oil industry has had a century to build its markets and infrastructure and make itself efficient,” Brehm continued. “The modern ethanol industry really only dates to the early part of this decade. We still have a ways to go.”
That will mean, he said, closings of plants and consolidation of companies. That already is happening with the shuttering of about 30 percent of U.S. ethanol capacity through the bankruptcies of Verasun Energy and several other producers.”The ethanol industry was built up very quickly since 2003, and not everybody had the complete skill sets to operate plants and ethanol businesses efficiently,” Brehm said.
Lincolnway hopes to be a survivor in the coming biofuels shakeout. Its 45 employees still operate two 12-hour shifts. Lincolnway has experimented with new energy sources, such as wood waste and tree limbs, that could supplement the coal that is the plant’s main fuel.
Brehm also is keeping an eye on using biomass, such as switchgrass and corn stover, as the raw material to make ethanol.”The future of this industry is in biomass, but we don’t know how soon it will arrive,” Brehm said.
For now, Lincolnway and other ethanol producers must deal with the nasty reality that demand for their product has weakened and the price has fallen.
Ethanol producers increasingly encounter oil companies that two years ago eagerly grasped for ethanol to blend with their unleaded gasoline to meet environmental mandates but now say they do not need as much ethanol as before.
An unprecedented nationwide drop in driving last year decreased demand for gasoline. With that decline came the corresponding drop in demand for ethanol to be blended into gasoline at a 10 percent rate.So when crude oil prices dropped by $100 per barrel from their summer peak last year of $147 per barrel, ethanol prices slid downward along with crude, and the biofuel lost its competitive edge against gasoline.
A study released last week by Sandia National Laboratories and General Motors Corp. pointed out that to be economical, ethanol needs to be priced at least $2.25 per gallon. Last week, ethanol sold for about $1.60 per gallon at Iowa blending terminals. Gasoline sold for an average of $1.77 and $1.90 in Des Moines last week.
Numbers like that have caused financial companies to turn their backs on ethanol. Des Moines investment manager Don DeWaay told a conference last week that “if gas prices stay where they are, then what use is ethanol?”Like other ethanol producers, Lincolnway has discovered that the waste byproduct of ethanol production, distillers grains, has a market among cattle feeders. While the price of ethanol has dropped by almost 50 percent in the past eight months, distillers grains have dropped in price only about 25 percent to around $120 per ton.
Lincolnway’s particular saving grace is its next-door-neighbor, Heart of Iowa Cooperative, which has a ready supply of corn. So Lincolnway has less need to plunge into the corn futures markets to secure supplies.That has helped it avoid the fate of Verasun, which was pushed into bankruptcy when its strategy of using short-selling and forward contracts to secure its corn supplies went bad last year.
Ethanol Investing Unwise-Ethanol Co. Defaults
February 19th, 2009MN ethanol company defaults on loan
Minneapolis / St. Paul Business Journal – by Sam Black Staff Writer
Otter Tail Ag Enterprises, which owns and operates a 1-year old ethanol plant near Fergus Falls, Minn. has defaulted on its $31 million master loan agreement with Agstar Financial Services and missed payments for two other debts it owes.
The Fergus Falls-based company failed to pay interest due on its agreement that was due Feb. 1, triggering the default provision of its loan, according to a filing Wednesday with the U.S. Securities and Exchange Commission.
Otter Tail Ag Enterprises also said that it has failed to pay interest due on its construction and term loan with MMCDC New Markets Fund, which totals $19.2 million.
It also has defaulted on a capital lease it has with Otter Tail County. It has failed to make basic payments on its capital lease for equipment related to a solid waste disposal facility. It owes $26.1 million to the county.
Otter Tail Ag Enterprises said in its SEC filing that its working with each lender on modifying or waving certain terms in each agreement to get back in compliance with repayment requirements.
Otter Tail Ag Enterprises, which makes corn-based ethanol, is seeking new investors and trying to raise money from its original investors, according to story in the Fergus Falls Daily Journal Tuesday.
The company began holding investor meetings in Morris, Alexandria and Fergus Falls this week.
“We’re all caught right now in a very difficult part of a down cycle,” Anthony Hicks, CEO of Otter Tail Ag Enterprises told the Daily Journal.
“However, we’ve seen this before in the agriculture and in ethanol and the industry should recover.”
Hicks blamed the industry slump on volatile commodity prices, the slow economy, too much capacity in the industry and not enough consumption, according to the paper.
Otter Tail County made its Feb. 1 payment on one of the $6 million bonds it took out for the economic development project even though it didn’t receive its scheduled payment from Otter Tail Ag Enterprises, said county auditor Wayne Stein.
County officials have been meeting and are working on a plan to address the debt, Stein said. The ethanol plant provides more than 30 jobs.
Biofuels More Harmful to Humans, Warns Scientists
February 11th, 2009Another U of M Ethanol Study
February 3rd, 2009
 Ethanol Study: Star-Tribune |
Eyota Residents Health Problems Associated With Ethanol Plant
September 2nd, 2008KTTC TV newscast video & article about the concerns Eyota residents have with the proposed MinnErgy ethanol plant. Click on the link below.