|
|
 |
|
 |
|
|
 |
What is ethanol?
Answer: 200 proof grain alcohol with a 5% denaturant (unleaded gasoline) added to prevent consumption and to avoid an alcohol tax being levied.
What can you make ethanol from?
Answer: Any starched based commodity, with corn being by far the most plentiful, practical, economical and locally available.
What is ethanol used for?
Answer: 50% of all ethanol is used as an oxygenate for reformulated gasoline consumed in areas of the country that require it. The other 50% is currently being used in many areas that do not require its use because of ethanol’s octane enhancement (117 octane), fuel expansion characteristics, and federal tax incentives.
How many people will an ethanol plant employ?
Answer: 30+ full time employees to run the facility 24 hours per day 7 days per week. Production is scheduled for 350 days per year.
What would the annual insurance costs be?
Answer: Approximately $150,000 per year
Are there any uninsurable risks?
Answer: Other than pure operational risks, none that we are currently aware of.
Where does our corn come from?
Answer: A considerable portion comes from local producers and elevators but we could contract with national companies to source and schedule delivery of the corn. Daily needs will be approximately 55,000 bushels per day per facility. Total yearly corn consumption will exceed 20 million bushels. 300+ million bushels of corn is grown in an average year within a 60 mile radius around the proposed site.
Is there any odor from the ethanol making process?
Answer: There is a slight odor from the drying process similar to that of a brewery. You could compare it to existing elevators in the community that dry corn at harvest time.
Are there any air pollution issues to consider?
Answer: Yes and those issues are all dealt with in the EPA permitting process. Older facilities are being required to update to meet the new clean air requirements. Small older facilities are struggling to absorb the costs of the new pollution controls mandated by the EPA.
Are there any water pollution issues to consider?
Answer: Yes. Again this is part of the permitting process. All water used is pretreated and discharged to the city sewer system in Lima. Most ethanol plant designers are adopting technology which comes close to zero–discharge for water that has come in contact with the alcohol fermentation process.
How much water does the facility use?
Answer: 3.85 gallons of water for each gallon of ethanol produced or about 220 million gallons per year. At the Lima facility, all water is purchased from the City of Lima. Raw water from the reservoirs is used in the ethanol process at a substantial savings over treated water.
Are there any adverse water discharge issues?
Answer: No, all water is pre-treated before discharge. We will discharge to the city sewer systems.
Where will we sell the ethanol?
Answer: Ethanol could be sold to any jobber or blender. We do have a supply agreement with a major consumer that receives the preponderance of our ethanol.
What is reformulated gasoline?
Answer: Regular gasoline that is blended with an oxygenate such as ethanol. Most metropolitan areas have an oxygenated fuel requirement and the fuel demand in these required areas is increasing annually.
How is the ethanol transported to the consumer?
Answer: Most that is consumed in Ohio will be delivered directly to the blender by over-the-road tanker trucks. The ethanol sold to the east coast will be shipped by rail, which is much more cost effective as distance increases.
Which states currently produce the most ethanol?
Answer: 85% of the total is produced in Illinois, South Dakota, Nebraska, Minnesota, and Iowa. Because ethanol was not mandated in the past, a supply push model focused on the cheapest source of inputs. This is changing today as demand increases significantly in mandated markets. The industry can be characterized as a demand pull model with more focus placed on location to end user markets.
How much ethanol is produced in the US now?
Answer: As of the end of summer 2008, the production capacity for the entire ethanol industry was approaching 10 billion gallons annually.
How many different ethanol production facilities are there currently?
Answer: As of summer 2008, there are currently 170 different operating facilities.
How much truck traffic will the facility create?
Answer: Approximately 400 semi-truck loads of corn in per week and 140 loads of ethanol and 140 loads of DDG’s out per week. Rail service is expected to reduce total truck volume by over 50%.
How much electricity will the facility use?
Answer: Approximately 57 million kW per year at a total cost of about 2.4 million dollars. This is roughly the amount of electricity used by 1,600 homes.
How much natural gas will the facility use?
Answer: Approximately 1.85 million MMBTU for an annual cost of about $16 million, based on current summer 2008 natural gas prices.
Why must some states and cities use reformulated gasoline?
Answer: They are mandated by the federal clean air standards act to use oxygenated gasoline to help reduce air pollution. By adding an oxygenate tailpipe emissions are reduced by over 30%.
Do the automobile companies’ warranties permit the use of ethanol?
Answer: Yes. All domestic and foreign car manufacturers’ warranties for currently selling cars in the United States permit the use of a 10% ethanol blend of fuel, many permit much higher percentages and a significant percentage are E-85 vehicles. The total number of E-85 vehicles on the road today is over 4,000,000.
What is the octane rating of ethanol?
Answer: 115- 117
If ethanol is needed for reformulated gasoline then why aren’t the oil companies building ethanol plants?
Answer: The main problem for the oil companies is that the ethanol business requires many relatively small plants in strategically placed areas where the corn is available. A successful ethanol facility will require local support, which will be easier to secure with local ownership than an oil company trying to develop. Until recently the oil companies relied on MTBE, a product that they or subsidiaries produced from fossil fuels. In addition, oil companies have experienced difficulties in the past few years and many are being consolidated. Each oil company has its own issues to deal with. The total fuel consumed in the U.S. is over 300 billion gallons. Ethanol makes up a little over 1% of the total U.S. market. The oil companies already have 99% market share and view ethanol as strictly an additive or octane enhancer.
Is there really enough corn in Ohio to make ethanol?
Answer: On an average year Ohio will produce nearly 500 million bushels of corn. Therefore, each facility will use about 4% of an average crop. As more facilities are added and new markets are created, farmers will shift acres away from soybeans, wheat, or hay and into corn to fill the new demand. Currently 250 million bushels or 50% of Ohio’s corn is exported out of Ohio completely unprocessed. This is the equivalent amount of corn to fuel twelve 54 million gallon ethanol facilities.
What happens if there is a drought?
Will we run out of corn?
Answer: No. Ohio had a drought in 2002 but the country as a whole still produced over 9+ billion bushels of corn. One of the numerous reasons for using a National Risk Manager to source the corn will be so they can use the entire corn belt for supplies instead of just Ohio in a year like 2002.
Does ethanol really help keep the air clean?
Answer: Yes. By blending up to 10% ethanol with regular gasoline harmful tailpipe emissions are reduced by over 30%. The added 10% ethanol also raises the octane rating 3.0 points and therefore increases the selling price per gallon. Ethanol is 30+% oxygen and gasoline is 0% oxygen, the blending raises the oxygen level in the finished product resulting in more complete burning and thus reducing emissions.
Who is the largest producer of ethanol now?
Answer: Archer Daniels Midland (ADM) is by far the largest producer in the US. They own several facilities and when combined they are easily the single largest producer, they currently own approximately 30% of the industry’s current capacity.
What if we find out that ethanol is bad for the environment?
Answer: Grain alcohol has been around for a very long time, so if there were any harmful effects on the environment they more than likely would have discovered them by now. Grain alcohol has been made for 100’S of years for human consumption. Ethanol is grain alcohol with a denaturant added. Federal law requires the ethanol producer to add poison (unleaded gasoline) to the ethanol in order to prohibit human consumption.
Can the ethanol industry capitalize on the pending buying and selling of carbon credits?
Answer: Under the current proposal an ethanol plant could possibly qualify for payments under the carbon credit proposal.
What is the market for Bio-diesel and how could it impact the ethanol industry?
Answer: Bio-diesel works a lot like reformulated gasoline. This would be a good companion facility to an ethanol plant. Bio-diesel has the same effect in reducing exhaust emissions in diesel engines. Bio-Diesel is diesel fuel blended with 2% soybean oil and a proprietary additive.
What is DDGS?
Answer: Distillers Dried Grains with solubles ( DDGS ) is a high protein co-product of the Ethanol production process commonly used to supplement animal feed. There are approximately 19 Pounds of DDGS produced per bushel of processed corn.
Where will we sell the DDG?
Answer: Local large dairy farms will use a considerable amount but a significant percentage will eventually be sent by rail to the southeast to help supplement their need for large amounts of corn and soybean meal. Other markets are the large dairy herds in Pennsylvania and New York. DDG is approximately 28% protein and usually sells for 125% the price of corn on a per pound basis.
The production of ethanol would appear to be a simple process. Is there anything that will make this process more efficient in the future?
Answer: Yes. There are new enzymes being developed which will extract more gallons of ethanol from each bushel of corn. There are also several seed companies working on developing high starch corn and high fermentable varieties that will produce more ethanol per bushel. Greater Ohio Ethanol intends to utilize both of these techniques to enhance profitability. Either one of these developments will greatly impact the profitability of the ethanol industry. This would give producers the opportunity to grow under contract for a specific market. Also, over the past decade the industry’s processing efficiency has increased from approximately 2.4 gallons per bushel to today’s 2.8 gallons per bushel. It is likely to reach 3.0 gallons per bushel in the next few years. 2.67 (average of the last ten years and guaranteed by the technology provider) was used in all financials models.
I’ve heard that ethanol is really just needed for southern California. Why should we build plants in Ohio when other states closer to California have even more corn that could be used to produce ethanol?
Answer: The truth is there will be more total gallons needed in the Northeastern U.S. than any other single area in the country. This plant’s geographical location to the northeast will be a huge transportation advantage.
|
|
|
|
