1. Industry Overview and Developments
Riverland Community College
December 6, 2006
Kasson, MN
Ralph Groschen
Senior Marketing Specialist
Minnesota Department of Agriculture

2. The state of Minnesota enjoys the benefits of processing over 20% million of the state’s annual 1.0 billion bushel corn crop. (Corn is the state’s largest agronomic crop)
And also over 10% of the state’s nearly 270 million bushel annual soybean crop.
There are thousands of farmers who are members of one or more ethanol and/or biodiesel plants making bio-fuels a powerful political issue in state and local politics.

3. Includes plants under construction as of September 2003

8. New Projects
HAWAII

9. Production, Producer Payments, and Economic Impacts
Minnesota Ethanol:
Production, Producer Payments, and Economic Impacts
(Fiscal Year: July 1-June 30)

10. Minnesota’s Ethanol Plants
Plant (Start date) Original capacity (millions)
Marshall (1987)
Morris (1991)
Corn Plus (1994)
Heartland (1995)
Al-Corn (1996)
CVEC (1996)
MN Energy (1997)
Ethanol 2000 (1997)
Pro-Corn (1998)
Cornerstone (1998)
CMEC (1999)
Exol (1999)
North Star
Total
Minnesota’s “Closed Cooperative” ethanol plants have seen such significant additional investment and growth over the years.
This suggests that profits enjoyed by producers motivated them to increase their investments, doubling and tripling the size of their plants.
Some of these same plants are currently working on additional expansions and/or incorporating new products or technologies that will reduce their use of natural gas.

11. 100% more energy w/ Ethanol
Return To Fossil Fuel Energy
100% more energy w/ Ethanol
Yields
1.67 Btu of fuel ethanol
(USDA)
1 Btu of fossil energy
Coal, oil, or gas
From an energy efficiency point of view, ethanol yields 1.35 units of energy for every unit of fossil fuel energy invested in the production of corn and the conversion of corn into ethanol.
By comparison the energy yield for gasoline is 0.8 units of energy for every unit invested. Therefore, the production of ethanol yields (1.35/0.80 = 1.6) 60% more energy than gasoline for every unit of fossil fuel invested.
Ethanol from corn is the most prominent technology today because of the low cost and availability of the crop. Many consider corn a bridge to other forms of biomass like cellulose from crop residue and municipal solid waste. Such technologies are not ready today but promise to dramatically increase the energy yield for ethanol production in the future.
Source of information on slide: USDA Agriculture Economic Report Number July, 2002.
0.805 Btu of gasoline

12. DDGs for 40 million gal. plant energy?
Total Process Energy
Total Electrical Energy
Total Energy Required
Total Energy from DDGs
1,440,000,000,000
508,000,000,000
1,948,000,000,000
1,954,000,000,000

13. Market Development 5 billion gallons used today, mostly in E10.
E85 is future possibility for market expansion. (MN is way ahead nationally)
May also develop other markets:
1. Aviation Fuel?
2. Diesel Fuel (Sweden)
3. E20 (Gov’s initiative)
4. RFG area O2 caps may be lifted

14. Where do we go from here?
Maintain existing industry through transition
“Cellulose” (biomass) to ethanol and other fuels.
Minnesota plants are taking the initiative.
Pathways
1. Use biomass fuels for process energy. (MN)
2. Enzyme/Fermentation DOE focus.
2. Thermochemical
A. Various thermochemical reactions (Pyrolysis- Synthetics)
B. Gasification “Syngas” and “biorefinery process” (MN)

15. 70% of today’s gasoline usage?
What’s Possible?
Year
Biomass
Yield
Tons/acre
Acres
Planted
(millions)
Cellulosic
Ethanol
(billion gals)
Corn
Total
2012
8.9 5
4.4
12.0
16.5
2017
12.5 19
24.8
14.6
39.4
2027
23.1 49
124.4
139.0
Source - Vinod Khosla
70% of today’s gasoline usage?

16. Fossil Energy Ratio (FER) = energy in fuel/fossil energy input
10.31
Michael Wang, Center for Transportation Research,
Energy Systems Division, Argonne National Laboratory

17. 280% more energy w/ Biodiesel
Return To Fossil Fuel Energy
280% more energy w/ Biodiesel
Yields
3.2 Btu of Biodiesel
(USDA & DOE)
1 Btu of fossil energy
Coal, oil, or gas
From an energy efficiency point of view, ethanol yields 1.35 units of energy for every unit of fossil fuel energy invested in the production of corn and the conversion of corn into ethanol.
By comparison the energy yield for gasoline is 0.8 units of energy for every unit invested. Therefore, the production of ethanol yields (1.35/0.80 = 1.6) 60% more energy than gasoline for every unit of fossil fuel invested.
Ethanol from corn is the most prominent technology today because of the low cost and availability of the crop. Many consider corn a bridge to other forms of biomass like cellulose from crop residue and municipal solid waste. Such technologies are not ready today but promise to dramatically increase the energy yield for ethanol production in the future.
Source of information on slide: USDA Agriculture Economic Report Number July, 2002.
0.843 Btu of Diesel Fuel

18. Minnesota Biodiesel 2% required in Minnesota since 9/29/05
3 plants, 63 million gallons production capacity
High blends & B100 used in summer by some
Filter problems in Winter ‘05 & ’06 blamed on biodiesel
Some “off-spec” biodiesel was shipped
Everybody used B2, most had no problem
Other potential causes of filter problems were not discussed

19. Diesel Filter Problems
Jan Cummins Diesel Bulletin
Diesel filter life has shortened steadily since Winter of 2004.
Major causes of plugging are:
“Asphaltine” polymers duel to high fuel temp
“Biological organism” growing in fuel
“Engine lubricating oil” mixed in fuel
Engine design, pipeline additives & used oil.
Biodiesel fuel mixed at “high levels” (B20)
“Solid Particle contaminants, (Dirt)”

20. Questions?