Valero officials say ethanol business is booming

Source: By Steve Sharp, Watertown Daily Times • Posted: Friday, October 3, 2014

JEFFERSON JUNCTION — Valero Renewables officials from San Antonio, Texas, presented an update Wednesday afternoon to the Daily Times during what has become a fairly frequent media briefing and visit to their firm’s massive ethanol production facility just north of Jefferson in the former Ladish Malting complex.

According to Valero Vice President of Communications Bill Day, the ethanol business — and production at Jefferson — is booming in light of the healing economy and a bumper corn crop in 2014.

Ethanol fuel is derived from corn and Valero began its tenure at the plant in 2010, using exclusively local corn.

Valero Renewables-Jefferson is located strategically halfway between Madison and Milwaukee off Interstate 94 along state Highway 26. The bio-refinery sits on 344 acres and started ethanol production in January 2008 under different operators.

According to Day, the facility uses a dry-grind fractionation production method and state-of-the-art technology to maintain industry-leading standards in production, safety, product quality and environmental stewardship.

The Jefferson plant annually processes nearly 40 million bushels of corn into 110 million gallons of un-denatured ethanol and nearly 400,000 tons of high-value co-products including bran, germ and CO2. The bio-refinery has a capacity of 110 million gallons of ethanol per year and employs approximately 65 full-time personnel.

“The entire kernel of corn is processed,” Day said. “Ethanol is an environmentally friendly, high-octane renewable fuel produced by fermenting converted corn starch with yeast. It is used as a blending agent with gasoline. Distillers grains are the co-product left after the ethanol is removed from fermented corn mash and are sold as a valuable livestock feed.”

Jefferson’s distillers grains are very high in protein, and contain fat, vitamins and minerals, making an excellent feed supplement for beef and dairy cattle, swine and poultry. The Jefferson plant markets dried distillers grains as well as a bran-plus-syrup mix and corn germ.

In addition to its Jefferson plant, Valero has facilities in Iowa, Minnesota, South Dakota, Nebraska and Ohio. It is the largest petroleum refiner in the U.S. in addition to its ethanol production. It has 15 petroleum refineries in the United States and buys 3 million barrels of petroleum per day for such purposes.

The 65 people employed in Jefferson produce ethanol that is trucked out of the facility to ports in St. Louis, Mo., and New York City, among other sites.

Day said Valero is proud of the fact it buys all of the corn it uses at its Jefferson facility from local farmers within a 50-mile radius of its Jefferson County plant.

“There is certainly plenty of corn in this area and we pay competitive prices,” Day said.

When asked about rail use in Jefferson, Day said corn and ethanol move in and out of the plant via truck and he was unsure if the substantial rail lines that run adjacent to the plant will ever be used.

Day said Valero is open to expansion in Jefferson Junction and an addition to the plant here is possible. Specifically, he said a new administration building is being planned, along with a machine shop.

Day added that cellulosic ethanol production could also be coming to Jefferson in the future. That type of production utilizes corn stalks and other organic matter in the fuel-manufacturing process. It is, however, deemed to be a more challenging process than working with corn.

“We are waiting for cellulosic ethanol production to become economically viable,” he said. “We can add it as a ‘bolt-on’ technology here in Jefferson that is not corn-based.”

Day and his colleagues are on a tour that will take them to six Valero plants in four days. They awoke in South Dakota Wednesday morning before flying to Jefferson to meet with local Valero personnel and the Daily Times in the afternoon. They were bound for Indiana in the late afternoon, flying out of Waukesha’s airport. A plant stop in Ohio was next on their list.

“Ethanol is doing very well now,” Day said. “The profit margins are good and, with the economy recovering, we are seeing ethanol use recovering, as well. Basically, it’s all good news today. Ethanol is strong and healthy. We knew the business would turn around. We are buying from local farmers. We have a safe and efficient operation and we intend to be good neighbors.”