Call ethanol ‘transitional.’ Just don’t call it dead

Source: By ErinJordan, The Gazette • Posted: Tuesday, September 21, 2021

Iowa’s biofuels industry, No. 1 in the nation, enjoys a resurgence

Doug Berven doesn’t mind if the word “transitional” is used to describe ethanol as a fuel — as long as people recognize the transition between gasoline-powered vehicles and an all-electric fleet likely will take some time and ethanol may have a part in the future.

“If ethanol is a bridge, it’s a very wide bridge and you can’t see the other side,” said Berven, vice president of corporate affairs for POET, one of the world’s largest biofuels producers, based in South Dakota.

Earlier this year, POET bought five Iowa ethanol plants and one Nebraska plant from Flint Hills Resources. The deal, which also includes two biofuels terminals in Texas and Georgia, expands POET’s production capacity by 40 percent, the company reported in May. POET now owns 33 bioprocessing facilities in eight states with a combined annual capacity of 3 billion gallons.

With the new plants, POET is poised to buy more than 1 billion bushels of corn a year, with much of that coming from Iowa farmers.

“We’ve always had the belief biofuels have a very long-term play in a lot of different areas,” Berven said. “One is in combating climate change, another supporting agriculture, another supporting consumers at the pump. The acquisition of Flint Hills shows our commitment to the long-term stability and strength of biofuels and the ag sector.”

National context

President Joe Biden in January committed to converting the entire federal vehicle fleet — 645,000 cars, trucks and vans — to electric vehicles made in America. These vehicles use almost 400 million gallons of gasoline and emit more than 7 million pounds of greenhouse gases, the Washington Post reported.

The transportation sector produces the largest share of U.S. greenhouse gases — just under 30 percent in 2019, according to the U.S. Environmental Protection Agency.

Biden’s announcement came as more car companies began ramping up electric vehicle production, with some, including General Motors, Jaguar, Bentley and Volvo, promising to stop producing vehicles with internal combustion engines in the next 10 to 15 years. Tesla already produces only electric vehicles.

With climate change knocking at our door, there’s a more urgent need to reduce greenhouse gases than 10 to 15 years down the road. That’s where ethanol comes in, according to industry proponents.

A new study, published in Environmental Research Letters, a peer-reviewed journal, provides a well-to-wheel analyses of greenhouse gas emissions for corn ethanol done by researchers from Harvard University, Tufts University and principal investigator, Melissa Scully, from Environmental Health and Engineering Inc. in Newton, Mass.

Well-to-wheel includes all emissions related to fuel production, processing, distribution and use.

The study showed the carbon intensity of corn ethanol was 51.6 grams of carbon dioxide equivalent per megajoule of energy — 46 percent lower than the average carbon intensity of gasoline.

The largest component, 58 percent, of the carbon intensity computation is the production of ethanol at a refinery, so energy-efficient plants had much better scores.

A Canadian study published in October 2020 in the journal Renewable and Sustainable Energy Reviews found replacing gasoline with an ethanol blend in Canada’s light-duty vehicle fleet could reduce well-to-wheel greenhouse gas emissions in 2030 by 7.2 percent for corn and wheat ethanol. The report noted that reduction is less than one-fifth of the reductions Canada committed to in the 2015 Paris Agreement on climate.

“The gap between bioethanol and gasoline is getting wider every day,” Berven said. “What we are telling the administration is ethanol is the only thing immediately available and clean and getting cleaner to meet the administration’s climate goals. You’re not going to do that with future technologies in nine years.”

Pandemic impact

When the COVID-19 pandemic hit the United States in 2020, many Americans stopped traveling for work and skipped vacations. With less demand, gas prices fell as much as 19 percent from 2019 levels, AAA Travel reported.

“That was pretty devastating,” said Monte Shaw, executive director of the Iowa Renewable Fuels Association. Many of Iowa’s 40 or so ethanol plants reduced or temporarily stopped production in 2020.

But the coronavirus vaccine made it safer for Americans to travel, and many have been hitting the road this year. Traffic on Iowa’s interstate, primary and secondary roads in May was 27 percent higher than May 2020 and was up nearly 14 percent for January through May from the previous year, according to the Iowa Department of Transportation.

With more demand, the price of gasoline — including ethanol blends — has more than doubled from 2020 levels. While motorists might not like paying more at the pump and, in fact, many politicians, including some from Iowa, have complained about the increases, ethanol producers are benefiting. Shaw estimated Iowa’s industry had returned to 90 percent of its pre-pandemic levels by June.

Profits recovering

“The demand has come back,” said Mike Jerke, chief executive officer of Southwest Iowa Renewable Energy, a biofuels refinery in Council Bluffs. “We’re seeing people moving about the country, and we’re seeing that reflected in our business. It’s a much-needed improvement. We’re hoping the momentum continues.”

The other factor in determining the profit margin for ethanol producers is the price of corn — the primary ingredient used to produce the fuel, said Chad Hart, Iowa State University economics professor and crop markets specialist.

“Corn cost is roughly two-thirds of the cost of producing that gallon of ethanol,” Hart said. “If corn prices are moving up, ethanol prices would need to move up by that same percentage to keep” that profit margin.

Corn rose from $3 a bushel in 2020 to $7 a bushel this past spring, but then backed down to $6 a bushel in May and June. “The industry can handle $6 corn as long as ethanol prices are high enough,” Hart noted.

If ethanol plants improve efficiency or install renewable energy, such as a wind turbine or solar panels, they may be able to produce ethanol that qualifies for use in California, where a low-carbon fuel standard is designed to decrease the carbon intensity of fuels used there. Brazil also has a low carbon fuel standard and Canada — a major U.S. ethanol market — has a new Clean Fuel Standard coming in 2022.

Ethanol byproducts

Ethanol producers long have used byproducts to create other goods, including corn oil and distillers grains for animal feed. One of POET’s new Iowa plants, in Shell Rock, last year implemented a Cedar Rapids-developed technology called Maximized Stillage Co-products, or MSC, that uses some of the stillage left after the ethanol process and concentrates the protein left in the processed corn.

The high-protein product can be fed to fish in aquaculture operations or to pets — both of which bring higher profits than cattle or hog feed.

Companies have learned to wring more corn oil out of the ethanol process, which has proved profitable as the price of vegetable oil has increased, Shaw said. And some Iowa ethanol plants have upgraded technology to produce purer, “pharma-grade” ethanol that can be used to make hand sanitizer.

Steve Guyer, energy and climate policy specialist for the Iowa Environmental Council, said he thinks ethanol companies are smart to consider non-fuel products.

“I believe ethanol may have a place, but not necessarily as a fuel,” he said. “The ethanol produced from these plants is nothing more than a chemical feedstock. Chemicals you can use to produce plastics.”

Bioplastics, made from 20 percent or more renewable materials, use less carbon than petroleum-based plastics, are less toxic and decompose faster, according to the Columbia Climate School. While bioplastics, made from the sugars in corn and other plants, may be a major improvement over traditional plastic, they would have to be sorted out from other plastics and disposed of properly to biodegrade, Columbia reported.

There also are concerns about the amount of fertilizer used to grow the corn used to make the bioplastics.

Some companies want to go further than just reducing carbon emissions at ethanol plants.

Burying carbon

Summit Carbon Solutions, a spinoff of Iowa-based Summit Agricultural Solutions, whose CEO is Bruce Rastetter, a former president of the Iowa Board of Regents, is developing a $2 billion pipeline that will transport carbon dioxide from Iowa ethanol plants to North Dakota. There, it is to be pumped into the ground, hopefully for good.

Navigator CO2 Ventures is proposing a similar pipeline that would sequester carbon in rock formations in Illinois.

“That could be a game-changer,” Shaw said of carbon capture pipelines.

He believes the United States need to implement policies, such as a low-carbon fuel standard, or incentives to pay for the high development cost for carbon pipelines.

“Some say ethanol is a transitional fuel, but to me, that doesn’t sound like a bad thing,“ Shaw said. “Why wouldn’t you want something that could be net carbon negative to be part of the long-term solution?”

Comments: (319) 339-3157; erin.jordan@thegazette.com

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