If you want to benefit from cellulosic ethanol production, it is not too early to evaluate where your operation might fit into the picture.
Over the next four years, the Department of Energy (DOE) will invest up to $385 million in six biorefineries. Between the DOE funding and industry cost share, more than $1.2 billion will be invested in these biorefineries. What's more, the DOE recently announced another $23 million in funding for five projects that are developing efficient fermentation organisms to convert biomass to ethanol.
Given these recent developments, the time may be right to talk with cellulosic ethanol technology companies about growing suitable feedstocks.
“From our perspective, it's never too early to start talking about cellulosic feedstocks with farmers because they are going to be such a critical piece of this process,” says Jeff Broin, president and CEO of Poet (previously known as Broin Companies), Sioux Falls, SD.
A leader in biorefining technologies, Poet plans to commercialize a process that will efficiently produce ethanol from corn fiber and cobs. With DOE funding of up to $80 million, Poet has a $200 million expansion project under way in Emmetsburg, IA. It is developing a biorefinery that will use corn fractionation and lignocellulosic conversion technologies to produce cellulosic ethanol.
After the expansion, the Emmetsburg plant will produce 125 million gallons of ethanol per year, a quarter of which will be cellulosic ethanol. “While there are challenges in developing the process, we see only positive results from the addition of cellulosic ethanol production,” Broin says. “By adding it to an existing grain ethanol plant, we will be able to produce 11% more ethanol from a bushel of corn and 27% more from an acre of corn, while almost eliminating our fossil fuel consumption and decreasing our water usage by 24%.
“We have included several farmers in our planning for cellulosic ethanol, and their feedback has been extremely valuable,” Broin continues. “As we get closer to production of cellulosic ethanol, we will engage a wider audience of farmers to collaborate on feedstock production, collection and delivery.”
A time to learn
“The next three to four years will be a time of learning for the industry,” Broin says. “Farmers should keep abreast of collection and storage developments during this time so that they can make informed decisions if a cellulosic plant is built in their area.”
Growers near a pilot plant might find it worthwhile to visit with plant management about their interest in feedstock supplies. Other farmers should wait and watch developments in cellulosic ethanol technology, says Robert Wisner, agricultural economist, Iowa State University.
In the Midwest, corn stover will likely be the first feedstock used in cellulosic ethanol production. Switchgrass will be another. In other regions, wood chips, municipal wastes and wheat straw have been considered.
Although commercialization of cellulosic ethanol is a few years away, farmers might find near-term opportunities in producing biomass for non-fuel energy production — heating, for example, says Nathanael Greene, senior energy analyst, Natural Resources Defense Council (NRDC), New York. “They should check what's going on in their neighborhoods,” he says.
Wisner suggests that, as commercialization gets closer to becoming reality, a producer who wants to grow cellulosic ethanol feedstocks should consider the following questions:
How will you harvest corn stover without slowing down related fieldwork? How will you store feedstock to protect it from dirt, molds, rodents, etc.?
How will you transport it?
What will be the costs of each of these operations?
Who will pay for storing feedstocks?
How much additional fertilizer will be needed to replace plant nutrients normally returned to the soil in the form of stover?
How much stover can be removed without creating serious erosion problems?
How will the cellulosic ethanol plant price stover?
Will the plant offer forward contracts or long-term production contracts?
What specific quality requirements will the plant use in buying feedstocks?
The plant will need a steady flow of feedstocks. Will it develop a shipping schedule for individual farmers?
“Plan what makes the most sense for the profitability of your farm,” advises Martha Schlicher, vice president of operations and engineering, Renewable Agricultural Energy (RAE), St. Louis, MO. “As a grower, I'd always err on production of a crop that has multiple uses versus a single use. Switchgrass, for example, is largely a single-purpose crop — only for use as a fuel — so it's difficult to understand why I'd consider this for any acres that have a food or feed application alternative.”
Growers should demand that cellulosic ethanol plant developers provide data they will need to support a financial decision on their farms, Schlicher says. This includes information related to yields, profits, impacts on soil, demonstrated agronomic practices and risks.
At the same time, farmers need to be mindful that cellulosic ethanol projects, because they will be so new, will require time, a great deal of capital investment from their developers, and a good management team, Greene says.
In their own operations, farmers will need to get a good handle on what it would cost them to produce, harvest, store and deliver (if required in the contract) feedstocks, says Wally Tyner, agricultural economist, Purdue University.
Farmers need to ask themselves whether they can make a profit harvesting some of the corn stover, Tyner says. “Be sure and consider the cost of replacing the nutrients removed when the corn stover is harvested,” he says.