A U.S. Department of Energy laboratory managed by The University of Chicago Analysis of the Efficiency of the U.S. Ethanol Industry 2007

May Wu Center for Transportation Research Argonne National Laboratory
Delivered to Renewable Fuel s Association on March 27, 2008

Summary

In 2007, the Renewable Fuels Association (R FA) conducted a survey of US ethanol production plants to provide an assessment of the current US ethanol industry. The survey covers plant operations in both corn dry mills and wet mills. In particular, it includes plant type, ownership structure, capacity, feedstocks, production volumes, coproducts, process fuel and electricity us age, water consumption, and products transportation and distribution. The survey re sponse was based on year 2006 data. At the request of RFA, Argonne Nationa l Laboratory (ANL) has perfor med a statistical analysis of the survey data, as an in-kind effort, under a non-disclosure agreement (NDA) between ANL and RFA. During November 2007 and January 2008, ANL processed and analyzed
the raw data for statistics. This extended technical memo serves as an official documentation to summarize ANL’s analysis.

There were 22 facilities that responded to the survey, repr esenting 1.813 billion gallon of annual fuel ethanol production, which is 37% of the 2006 pro duction (4.9 billion gallons). The results of the statistical analysis from th is survey were compared with a Department of Agriculture (USDA) ethanol plant survey conducted in 2001. In comparison to those 2001 findings, the ANL analysis found:

• Ethanol yield per bushel of corn increased 6.4% for dry mills and 2.4% for wet
mills.

• Total energy use (fossil and electricity) decreased 21.8% in dry mills and 7.2% in wet mills from 2001 survey.

• Another major change from 2001 survey is 15.7% decrease in grid electricity use in dry mills.

• There is a shift in process fuel use from coal to natural gas in the dry mills.

• More than one third (37%) of the dried dist illers grains with solubles (DDGS), the feed co-product of dry mill ethanol production, was sold as wet feed which reduces heat demand in the plant.

• CO 2 collection and production as a co-produc t is on the rise that a total of 23.5% of the ethanol production cap acities responded exported CO 2

.

• Finally, water consumption in dry mills decreased 26.6% from 2001 survey.A U.S. Department of Energy laboratory managed by The University of Chicago Results
1. General results

There were 22 facilities that responded to the survey, repr esenting 1.813 billion gallon of annual fuel ethanol production, which is 37% of the 2006 pro duction (4.9 billion gallons). The majority of respondents are Limited Liab ility Corporations (LLC) - owned dry mills and investor-owned wet mills (Table 1). Th e data reflects rapid growth of the corn ethanol industry, particularly in dry mills in recent years. Among the respondents, two thirds of dry mill facilities were built af ter 2001, with a quarter of those undergoing expansion from 2001 to 2007. Corn is still th e major feedstock, accounting for 97% of ethanol production. Three percent of ethanol is produced from milo (sorghum).

Table 1. Ethanol plant ownership Dry mills Wet mills

LLC 52% Investor owned 83% Farmer owned corp. 11% Public stocks 17%

Investor owned 24%

Public stocks 13%

2. Production

There is a considerable variation in production capacity in both dry and wet mills (Table 2). Average scale of dry mills is 52.7 million gallons per year (MMGY) and that for wet mills is 145.9 MMGY (Table 2). A bushel of corn in 2006 generates 2.81 gallons of denatured ethanol in a dry mill and 2.74 gallons in a wet mill. The highest yields from those responding reach 2.96 gallons per bushel (gal/bu) in a dry mill and 2.87 gal/bu in a wet mill. An average dry mill facility proce ssed 17.7 million bushels of corn a year. The amount of corn processed in average wet mill was 52.7 million bushels annually.

Table 2, Ethanol producti on per plant (MMGY) Dry mills Wet mills Total ethanol production (MMGY)

Mean ±SD* 52.7 ± 21.6 145.9 ± 92.8
Range 28.7 – 105.5 48.8 – 297.8

Yield (gal denatured ethanol/bushel of corn)

Mean ±SD* 2.81 ± 0.09 2.74 ± 0.13
Range 2.62 – 2.96 2.51 – 2.87

Corn feed^ (MM Bushel/yr)

Mean ±SD* 17.7 ± 9.1 52.7 ± 32.7
Range 1.7 – 37.0 16.3 – 106.5

*SD – standard deviation ^Ethanol produced from milo is not included.

3. Co-productA U.S. Department of Energy laboratory managed by The University of Chicago Dried distillers grains with solubles (DDGS) remain a dom inant co-product. Increasingly, plants are providing wet DDGS to animal feedlots. Delivery of wet DDGS reduces heating costs for DDGS drying in the ethanol plant. Data shows that more than a third (36.7%) of DDGS is currently sold as we t feed (Table 3). Carbon dioxide (CO 2 ) as a coproduct of ethanol production is on the rise from both dry and wet mills. Dry mills that collect and export CO 2 represent 32% of ethanol production surveyed, which for wet mill is 17%. Together, they represent 23.5% of the ethanol production capacities.

Table 3. Co-products produ ced from ethanol plant Dry mills Wet mills Co-products production (dry lb/gal) DDGS CGF/CGM

Mean ±SD* 5.9 ± 0.8 6.5 ± 2.0
Range 4.7 – 8.1 3.3 – 9.5

Fraction sold as wet feed (%)

Mean ±SD* 36.7% ± 37.0% 41.1% ± 45.9%
Range 0 – 100% 6 – 100% Share of facilities exports CO 2 (as ethanol production percentage)^ 31.6% 16.9%

*SD – standard deviation ^ Ethanol production share of CO 2 producing facilities in total ethanol production

4. Energy

The average dry mill facility requires 31070 British thermal units (Btu), including electricity, to produce a gallon of fuel et hanol (as a denatured gallon) (Table 4). Electricity usage for dry mills averaged 0.70 kilowatt hours per gallon (kwh/gal). A majority of dry mill facilities (86%) generate heat to produce the steam necessary to run the facility using natural gas (NG), on a Btu basis. The remaining 14% are coal fired dry mills that supplement coal use with a range of NG (3-23%) as process fuel.

For wet mills, 47409 Btu are required to produ ce a gallon of ethanol (as a denatured gallon). Although wet mills require large am ount of electricity, most of them are equipped with co-generation cap abilities to meet internal electricity needs and thus reduce net grid electricity demand. Average na tural gas and coal use per gallon ethanol produced is presented in Table 4. More energy is needed for ethanol pr oduction if coal is the choice of process fuel.

Table 4. Ethanol plant process energy use Dry mills Wet mills Total energy including electricity (Btu/gal 1 )

Mean ± SD 2 31070 ± 7490 47409 ± 14641
Range 17706 – 44034 28795 – 63422 Electricity 3 (kwh/gal)A U.S. Department of Energy laboratory managed by The University of Chicago Mean ± SD 2 0.7 ± 0.35 1.96 ± 0.67
Range 0 – 1.57 0.75 – 2.89
Natural gas 4,6 (Btu/gal)

Mean ± SD 2 27589 ± 6358 14461 ± 9586
Range 16000 – 36883 3397 – 30830

Coal 5,6 (Btu/gal)

Mean ± SD 2 29174 ± 1708 30448 ± 21158
Range 27966 – 30381 0 – 58553

1. Denatured ethanol
2. SD – standard deviation 3. Grid electricity for dry mills. Grid and cogen electricity use for wet mills. 4. Ethanol plant fueled with natural gas 5. Ethanol plant fueled with coal also use 3-23% (Btu NG in total Btu use) of NG 6. Most wet mills use both coal and NG as proces s fuel except one facility that uses 100% NG.

Table 5 shows a break down of process fuel type for dry and wet mills. Natural gas holds 79.2% share in dry mills, followed by coal (12.7 %) and grid electricity (7.9%). In wet mills, the predominant fuel is coal (71.6%), followed by natural gas (27.1%). Biogas, tire combustion, residual oil, and liquefied petr oleum gas (LPG) as process fuels each represent less than 1.2%.

Table 5. Share of process fuel s in ethanol production plants Dry mills Wet mills

Grid electricity 7.9%

- 1

NG 79.2% 27.1%

LPG 0.2%

Coal 12.7% 71.6%

Residue oil 0.02% 0.04%
Biogas 0.1%

Tire 1.15%

1. Shares of fuel type for wet mill do not include grid electricity because some of the plant data did not differentiate between grid and co-g en electricity. Since almost every wet mill has co-gen capability, the grid electricity required is likely small.

5. Water

According to the survey responses, current dry mills use 3.45 gallons of fresh water to produce a gallon of ethanol (as a denatured ga llon). Water use in wet mills is 3.92 gallons per gallon (Table 6). The lowest amount of water use from those respondents is 2.65 gal/gal for dry mill and 1.2gal/gal for wet mill. There are significant variations in water use. Newly built plants tend to require less water, possibly due to improved design. OnA U.S. Department of Energy laboratory managed by The University of Chicago average, dry mill requires 14.5 pounds (lbs) of steam to producing a gallon of ethanol (denatured). The steam required in wet mills is 29.5 lbs/gallon.

Table 6. Water and steam use Dry mills Wet mills

Water (gal/gal ethanol) 1

Mean ± SD 2 3.45 ± 0.59 3.92 ± 1.76
Range 2.65 – 4.90 1.20 – 6.10

Steam (lb/gal ethanol) 1

Mean ± SD 2 14.47 ±7.63 29.54 ± 14.47
Range 0.60 – 29.60 13.40 – 45.70

1. Denatured ethanol gallon

2. SD – standard deviation

6. Product transportation and distribution

Ethanol and co-products are shipped to des tinations via various transportation modes: truck, barge, rail, and pipelines. As indicated in Table 7, ethanol mills rely heavily on rail to deliver ethanol. Rail shipments are responsib le for the transportation of three quarters (74%) of dry mill ethanol production and two-thirds (66%) of wet mill ethanol production. Rail and truck split DDGS delivery, wh ile the majority (76%) of corn gluten feed and corn gluten meal, the co-products of wet mill ethanol production, are transported by truck. Most of the CO 2 from dry mills is shipped via trucks (83%) and remaining by pipelines (17%). In wet mills, half of the CO 2 is delivered through pipeline, 37% by rail, and a small portion (13%) by truck.

Table 7. Average transportation mo de for products and co-products

Diesel is the major transportation fuel used for feedstock and product delivery (Table 8). A qualitative representation of the dry mill product distribution is shown in Figure 1. Data for dry mill product distribution is inco mplete and therefore not presented. Ethanol produced from wet mills is distributed primar ily in Petroleum Administration for Defense District (PADD) 1 (43%) and PADD2 (31%). Th e rest is distributed to PADD 3 (11%), PADD4 (4%), and PADD5 (11%). Truck Rail Barge Pipeline Dry mills

Ethanol 26.3% 73.7%

DDGS 43.5% 56.5%

Wet cake 100.0%

CO 2 83.3% 16.7%

Wet mills

Ethanol 25.0% 66.0% 9.0%

CGF/CGM 76.0% 1.0% 24.0%

CO 2 13.0% 37.0% 50.0%A U.S. Department of Energy laboratory managed by The University of Chicago Table 8. Transportation fuel use in dry mills*

* Data for wet mills are not available

.

Figure 1. Dry mill ethanol
distribution.

7. Comparison to USDA 2001 ethanol plant survey

Based on the survey data and statistics, a comparison was made with USDA 2001 ethanol plant survey for ethanol yiel d and energy use. Table 9 pr esents the results of the comparison based on denatured ethanol. Ethanol yield increased 6% for dry mills and 2% for wet mills. Total energy use (fossil and el ectricity) decreased 21.8% in dry mills and 7.2% in wet mills from 2001 USDA survey. A nother major change from 2001 survey is 15.7% decrease in grid electricity use in dry mills. In addition, water consumption in dry mills decreased 26.6% from 2001 survey.

Table 9. Comparison of yield and ener gy use in ethanol production plant Dry mills Wet mills

RFA 2007 survey

Yield (gal denatured ethanol /bu) 2.81 2.74

Total energy use ( btu/ gal denatured ethanol) 31070 47409

Grid Electricity share in total process fuel use 7.9% NA

Consumptive water use (gal/gal denatured ethanol) 3.45 3.92

2001 USDA survey* Yield (gal denatured ethanol /bu) 2.64 2.68 Gasoline Diesel LPG E85

% of total transportation fuel use 13.0% 75.2% 9.4% 2.4%A U.S. Department of Energy laboratory managed by The University of Chicago Total energy use ( btu/ gal denatured ethanol) 39719 51060 Grid Electricity share in total process fuel use 9.4% 0% Consumptive water use (gal/gal denatured ethanol)** 4.7 NA

Change from 2001 survey
Yield (gal denatured ethanol /bu) 6.4% 2.4%
Total energy use ( btu/ gal denatured ethanol) -21.8% -7.2%
Grid Electricity share in total process fuel use -15.7%
Consumptive water use (gal/gal denatured ethanol) -26.6%

* Source: Shapouri, Duffield, and Wa ng, The energy balance of corn ethanol: An update, USDA AER/ 814, July 2002.

** Shapouri H., Gallagher, P., July 2005, USDA's 2002 Ethanol Cost-of-Production Survey