Frazier, Barnes & Associates has always been at the forefront of innovative technologies and ethanol plant optimization strategies. Our economic and operational models have proven to be invaluable resources for the ethanol industry.
The ethanol industry, once one of the fastest growing industries in the world, has been subjected to severe pressure from high price volatility, negative PR campaigns, the 10 percent blendwall and the economic meltdown. The industry focus has shifted from rapid expansion to cost competitiveness, GHG reduction and profit maximization.
Although the business environment is expected to improve over the next 12 months, existing ethanol plants must determine how to optimize their ethanol plants now to achieve long-term sustainability. Substantial growth is tempered by economic realities and the political parlaying that keeps corn based ethanol from becoming an “Advanced Biofuel.” According to the following chart, cellulosic and Advanced Biofuels will make up a considerable portion of future ethanol growth.
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EPA Plays a Role in Ethanol
In February 2010 the E.P.A. (Environmental Protection Agency) released new RFS2 Regulations (Renewable Fuels Standard 2). This affects all renewable fuels and how they are produced. In March 2010 the E.P.A. released EPA Regulation 40 CFR part 80 Final Rule. This sets Specific Volume Standards for all Renewable Fuels. Ethanol must now achieve “Significant Reductions of Greenhouse Gas Emissions”.
Future of Ethanol
Ethanol will not go away. Distressed ethanol plants have been snapped up by oil companies and other investors with a long-term outlook and an understanding that Renewable Energy has become part of the fabric of our energy strategy. The Renewable Fuel Standard requires an increasing amount of renewable fuel to be blended in with fossil fuels. Ultimately, we must ascertain how to get from just over 10 billion gallons to 36 billion gallons. For 2011, the following volumes have been proposed:
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Feedstock
At the heart of ethanol profitability is the availability and cost of feedstock, whether its corn, bran, stalks, sorghum, barley or switchgrass. Assuring the supply of inexpensive and reliable feedstock for an ethanol facility is a vital concern during the feasibility stage and ultimately plant operations.
FBA has invested countless hours examining feedstock logistics, historical and projected prices for ethanol facilities to determine the trends on a site specific basis. Improved efficiencies at existing biorefineries, new process technologies, commercialization of cellulosic conversion technology, and additional industry consolidation will provide a platform from which this industry can launch and expand into a new, sustainable and renewably fueled era in American history.
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