Fueling interaction. Fueling innovation. Fueling revolution.

In a year where market conditions and media exposure have attempted to impede the progress of the industry, ethanol supporters united last month at the American Coalition for Ethanol’s 21^st annual ethanol conference and trade show to send the resounding message that domestic ethanol production has a bright future ahead.

More than 1200 ethanol producers, parts and service provides, and advocates gathered at Omaha, Nebraska’s Qwest Center August 12-14 to make new connections and share information. The ACE conference emphasized ethanol’s role in reducing foreign oil dependence by strengthening infrastructure, improving production efficiency, and expanding the role of mid-range ethanol blends.

ACE leadership rallies crowd behind the ethanol revolution

“ Ethanol is the fuel of revolution, and we are the fuel for revolution ,” ACE President Bob Scott said in his opening remarks at the conference general session. “We have the fuel for revolution, and it’s in the power, faith, spirit that is in everyone in this room.”

Scott compared the ethanol revolutionaries today to the American revolutionaries who, against tall odds, persevered and came out victorious against better equipped, better funded adversaries.

ACE Executive Vice President Brian Jennings reminded the audience of just how far the U.S. ethanol industry has come.

“The people in this room are no doubt concerned about the adversity that confronts our industry today,” Jennings said. “It is instructive to consider how far we’ve come and how we got to this point. Recall that our success wasn’t inevitable. Rather, it was the result of our collective and unified public policy and market development efforts over the space of many years – a lot of hard work.”

He added that the expansion of ethanol is truly a revolution – a revolution to make gasoline the alternative fuel – and this has profound implications for those who wish to protect the status quo.

“We need to have the sophistication and judgment to understand that we’re being attacked today not because we’re trailing – we’re being attacked because we are winning ,” Jennings said.

Ron Lamberty, ACE Vice President / Market Development, echoed the sentiment of victory by calling on audience members who, like himself, believe in the benefits of mid-range ethanol blends with such conviction that they fuel their standard vehicles with blends beyond 10 percent. With more than a dozen rising from their chairs, the commitment of ACE members to the future of ethanol was very apparent.

“We think all cars can be flexible, and all can be at least a little more flexible today,” Lamberty said. “A revolution is not for the weak of heart.”

Industry experts showcase innovations in ethanol

Nebraska Governor Dave Heineman opened the afternoon’s session expressing his pride in the state’s ethanol industry and its positive impact for rural economies.

"Corn-based ethanol is going to be around for a long, long time. It's the foundation for the future,” Governor Heineman said.

Part of the fueling revolution seen in recent years resulted from innovations in technology, both in producing ethanol and in producing the feedstocks. The “Innovations in Corn Ethanol” presentations were prefaced by remarks from panel moderator Rick Tolman, CEO of the National Corn Growers Association.

Tolman entertained the audience with his recitation of the litany of injustices behind which ethanol has been named culprit, ranging from starving babies to the disappearing rainforest, even to the follies of pop culture celebrities. Though the popular media has given coverage to many unfounded ethanol criticisms, he emphasized that the real story is that America’s corn growers and ethanol producers are operating innovatively and efficiently, and more so every year.

“And we haven’t seen anything yet,” Tolman said, referencing the awesome advances in corn genomics that are moving previously unimaginable yields to the realm of possibility.

VeraSun Energy’s Director of Technology Development Rob Nelson and Chippewa Valley Ethanol Company’s Engineering Manager Andy Zurn discussed the latest innovations at their ethanol plants, including the oil extraction facility at VeraSun’s Aurora, South Dakota plant which will extract the corn oil from the distillers grain for sale to the biodiesel market, and the biomass gasifier now in place at CVEC which burns wood chips to reduce the amount of natural gas consumed by the facility.

Innovations like these are indicative of where the production of corn ethanol is headed – continued efficiencies in production, alternative power sources, the fractionation of the corn kernel, and a host of new products in a more biorefinery-like approach.

The implementation of RFS2 is on the minds of many in the industry, and Paul Machiele, Director for Fuel Programs, Assessments & Standards Division, for the U.S. EPA, spoke to conference attendees about the implementation strategy for ensuring the 9 billion gallons of ethanol use – and subsequent higher levels in the coming years – are achieved.

A significant portion of the growing RFS will be committed to cellulosic ethanol, and at the conference, experts from ICM, POET, and Range Fuels spoke about the companies’ advancements toward the commercialization of ethanol from cellulosic sources.

Doug Rivers, Director of Research & Development for ICM, stated that the company is working to integrate grain ethanol and cellulosic ethanol production, to "leverage one off the other and gain synergies of operation, not just from a technical standpoint but from a cost standpoint as well."

The company is currently rolling out a fractionation process that gets at the parts of the corn kernel, the germ, fiber, and endosperm. Today at the LifeLine Foods facility in St. Joseph, Missouri they are combusting the fiber as thermal energy, and by the end of the year, they will go commercial at a pilot facility also in St. Joe.

Bill Schafer, Senior Vice President Business Development for Range Fuels, said that the company has broken ground on a commercial-scale cellulosic plant in Soperton, Georgia to make ethanol from woody biomass. They plan to be producing ethanol by next year. Schafer believes that market development efforts are important so that not only will ethanol production levels be able to match the Energy Independence and Security Act, but also so the marketplace can readily accept what America's ethanol producers are able to offer.

"ACE has been fantastic I think in encouraging research and work in that area. Testing conservatively indicates that more than 20 percent ethanol is achievable in existing vehicles ," Schafer said.

Larry Ward, Vice President of Project Development for South Dakota-based POET, agreed that market development is key. " As we develop cellulosic ethanol, it is important that we continue to build the markets for ethanol. Market development, not just technology development ," Ward said during his presentation.

POET is focusing on making ethanol out of corn cobs and corn fiber. Project BELL is the company's new pilot plant, built specifically for experience in cellulosic ethanol. Project LIBERTY is a partnership with the DOE at the company's existing corn ethanol plant in Emmetsburg, Iowa. They expect to be operational at the pilot facility, located in Scotland, South Dakota, later this year and producing cellulosic ethanol in Emmetsburg by late 2011.

Day two looks to infrastructure, regulatory issues

Thursday morning’s general session featured speakers whose focus is transforming today’s transportation and use of ethanol into tomorrow’s marketplace.

The “Pathway to Higher Blends” panel speaker Ralph Groschen of the Minnesota Department of Agriculture detailed his state’s efforts to study E20 and move toward federal approval of this fuel blend. Steve Przesmitzki from the National Renewable Energy Laboratory (NREL) shared information about the detailed steps that must accompany the approval of any new fuel and about the technical questions that are being addressed about the use of blends beyond 10 percent in standard vehicles.

Shipping ethanol via pipeline is a topic of increasing interest as ethanol production expands and the fuel reaches new markets. Mike Malecha of Renewable Products Marketing Group (RPMG) moderated a panel discussion on the topic. Dan Ownby, Director of Business Development for TEPPCO Partners, L.P., pointed out that as increased volumes of ethanol are produced and consumed, the exploration of pipeline infrastructure becomes viable.

Jim Lelio, Director of Business Development for Kinder Morgan Energy Partners, L.P., said that despite the logistical hurdles that lie between today’s ethanol marketplace and its future expansion, pipelines “can be a very valuable tool in the overall solution.”

The final presentation of the conference was by John Kruse of forecasting company Global Insight, who offered analysis of a Low Carbon Fuels Standard that’s been passed in California and proposed for the rest of the country, and what it might mean for the nation’s ethanol industry. The purpose of a Low Carbon Fuels Standard is to serve as a comprehensive plan for reducing greenhouse gas emissions. Because of the way some scientists are proposing to measure what they term “indirect emissions,” ethanol may run in to some problems and not be able to qualify as a low-carbon fuel.

Kruse said he’s concerned that regulations are getting ahead of the science. He notes that there’s not much hard data to be had on this issue, and some of the studies out there have error margins as high as 55 percent. “And yet we’re ready to make regulations based on these,” he said.

Global Insight is completing a study soon for the American Coalition for Ethanol on the subject of how a Low Carbon Fuels Standard might impact biofuels.

It is the ability to look forward to the next steps – pipelines, mid-range blends, new regulatory models – that best characterizes ACE and its members and supporters. The commitment to revolutionizing the way America fuels its vehicles and its energy needs was unmistakable at this year’s conference, and the energy in Omaha will carry the ethanol industry through the challenges and opportunities that await it.