In ramping up to build one of the world’s first commercially viable cellulosic ethanol plants at its Emmetsburg, Iowa biorefinery, POET is preparing to change not only how fuel is made, but also how farmers help to produce it.
POET Biorefining – Emmetsburg will hold a place in history as the site for one of the world’s first commercial cellulosic ethanol plants. The new facility will produce 25 million gallons per year of ethanol made from corn cobs. So what’s that really mean?
“If we can make ethanol from corn cobs, which is a form of biomass [plant material, vegetation, or agricultural waste used as an energy source], then we can eventually make ethanol from other biomass, which is everywhere,” says Jim Sturdevant, Director of Project LIBERTY. “The U.S. Departments of Energy and Agriculture say there is well-over one billion tons of biomass available every year in the U.S., which could be used to make 85 to 90 billion gallons of ethanol. That’s about 60 percent of our nation’s fuel supply, which just happens to be about the amount of oil we import annually. Biomass has great potential to help our country achieve energy independence.”
But Sturdevant says that’s not all.
“This is also going to change the face of agriculture in the Corn Belt,” continues Sturdevant. “Initiatives like Project LIBERTY will allow our nation to get more transportation fuel from the same amount of land, without having to plant something different. By working with farmers and equipment companies to add a step of collecting those cobs, we have boosted the amount of ethanol produced from the same acre.”
But before the Emmetsburg facility was chosen to be the home of Project LIBERTY, it had first established itself as an up-andcoming player among the POET family of biorefineries. Here’s a little of that story.
When POET announced its decision in 2004 to build a grainbased biorefinery at Emmetsburg, it was a good time for the ethanol industry. Existing plants were earning good returns for their investors and revitalizing rural communities, and new ethanol plants were a much easier sell than a few years earlier.
“When POET approached us about building a plant here, corn was around $1.50 to $2 per bushel, farmers were living on government subsidies, and the future of agriculture didn’t look very bright,” recalls POET Biorefining – Emmetsburg Board Member Craig Brownlee, a local farmer and farm manager. “But ethanol was doing well and we jumped at the idea. Our fundraising efforts really went very well.”
Construction followed suit. Ground was broken in April of 2004 and the plant commenced operations in March of 2005. It was POET’s 14th biorefinery and the company’s fourth in Iowa.
“The actual construction only took nine months,” recalls Emmetsburg General Manager Daron Wilson. “We hit our nameplate capacity (50 million gallons per year) within five days, and have consistently exceeded that ever since. It was a very successful plant build and start up.”
The Emmetsburg facility was one of the first POET biorefineries to include the company’s new BPX technology, which uses proprietary enzymes to convert raw starch from corn and eliminate the need for cooking. Upgrades soon followed, with added fermentation capacity in 2005, and two million bushels of grain storage capacity added in 2007.
Earnings were excellent the first couple of years, although margins narrowed for the entire industry shortly after that. But one factor that has remained steadfast throughout is the positive feelings of the community about the Emmetsburg plant.
“This community’s been very positive about everything to do with the plant — from the initial build, to community events regarding Project LIBERTY, to field days — the whole process,” says Wilson. “This is a small community and everyone knows someone at the plant. You just don’t hear any negative feedback at all, which is not typical of a lot of industries.”
Kris Ausborn, Palo Alto County Economic Development Director appreciates the support POET has provided the community.
“The working relationship between the community and POET has been excellent from the start,” says Ausborn. “POET actively supports Emmetsburg beyond monetary considerations with team members volunteering their time and talents to many worthy causes.”
LANDING PROJECT LIBERTY
Things change fast in the ethanol industry, and when POET decided in late 2006 to select Emmetsburg as the site for Project LIBERTY, that same strong community support played no small role in the decision.
“Our community fully supports the environmental and economic benefits that Project LIBERTY will bring to the area,” says Ausborn. “It’s important to find renewable fuel sources to reduce our dependence on foreign oil and Emmetsburg is located to provide sufficient plant materials to allow for the commercial production of cellulosic ethanol.”
“From the earliest days, the Emmetsburg community has been very supportive and enthusiastic, always with an attitude of ‘how can we help this become a reality,’” says Larry Ward, POET Vice President of Project Development.
Additional criteria included being a well-managed existing facility with a good track record, a good farmer mix, strong support from the state of Iowa, proximity to POET’s cellulosic teams in Sioux Falls and the POET Research Center in Scotland, and somewhat surprisingly, the quality of corn cobs.
“We’d found that area to consistently produce a good quality of corn cob, as well as a consistent supply” states Ward. “Putting all those factors together, we finally decided, ‘This is where the first one [cellulosic plant] belongs.’”
PARTNERS PRESSING ON
A project of the magnitude of LIBERTY can’t be accomplished without partners, and POET has some excellent ones. The cost for LIBERTY is projected at just over $200 million, and POET has received grants from U.S. DOE and the state of Iowa.
“It’s humbling and we’re very grateful that they’ve selected us to partner with them to help meet the nation’s energy goals,” says Sturdevant. “But I also believe that the quality of our other partners – farmers, equipment companies, and the community –are factors in the government’s confidence in us.”
Another vital contributor essential to Project LIBERTY is the POET Research Center at Scotland, South Dakota. This facility has been producing cellulosic ethanol at the pilot scale since November of 2008, and is currently producing 20,000 gallons of ethanol per year.
Progress toward Project LIBERTY is moving steadily forward, but being the first to produce cellulosic ethanol is not the biggest priority.
“Our real goal is to develop the technology, make it profitable, and replicate it throughout the country so we can significantly increase the amount of ethanol out there and further move our country toward energy independence,” says Sturdevant.
So what kind of satisfaction is there in tackling a project like LIBERTY?
“It’s really added a lot of excitement here,” says Wilson. “Our team at Emmetsburg understands the big picture of what we’re doing – working towards energy independence, creating a better environment and new opportunities for farmers and the community. Most people never get the chance to do something like this — it’s something that’s never been done before. That’s an amazing opportunity!”
Jim Sturdevant, Hub of the Liberty Wheel
Back when Jim Sturdevant was an undergrad at South Dakota State University studying geography, he never imagined himself directing the creation of one of the world’s first commercial cellulosic ethanol plants.
“I couldn’t even spell ‘cellulosic’ then,” laughs Sturdevant.
But one thing he did know was that the earth and the environment were very important to him. During a career that included 22 years with the U.S. Geological Survey, he managed a series of increasingly large projects measuring environmental changes to the earth. At a time when many of his peers were beginning to retire, a position became available at POET directing Project LIBERTY. During his interviews, one of the interviewers asked him what he wanted out of the next few years of his career before he retired.
“I told him I wanted to do something significant,” recalls Sturdevant, 54. “Then he said, ‘I think we’ve got the right job for you.’”
Sturdevant describes his gargantuan task of directing LIBERTY as similar to being “the hub of the wheel.”
“The spokes of the wheel are the various elements within POET, the U.S. Department of Energy, the state of Iowa, and our many other partners,” says Sturdevant. “My job is to keep that wheel spinning toward the completion of Project LIBERTY in a coordinated way, and making sure everyone in the wheel is well informed.”
So how does it feel to direct a project like LIBERTY, that’s on the cutting edge of our nation’s energy campaign?
“I’m very proud to be part of such an opportunity. It’s humbling, but very rewarding,” says Sturdevant, who says he keeps focused by “keeping my eye on the ball and the tasks at hand.”
Sturdevant reports that although there have been challenges and minor setbacks, overall progress has been good and is on schedule.
“Every so often when I have a rare, reflective moment, I’m amazed at how far we’ve come in such a short time.”
The Lowly Corn Cob: Finally Getting Some Respect
The late comedian Rodney Dangerfield had nothing on the corn cob when it comes to getting no respect. Since the advent of combines that shelled corn, cobs have largely been left to rot in the field. In the earlier days of ear corn, they were either a minor ingredient in cattle feed or went straight down the chute to the elevator’s cob incinerator. And before toilet paper, early settlers in the Corn Belt frequently kept a bucket of cobs in the outhouse.
But Project LIBERTY is quickly elevating the cob’s status. This year in the Emmetsburg area, 14 farmers harvested around 15,000 acres of cobs.
“In producing cellulosic ethanol, corn cobs are the low-hanging fruit today,” explains LIBERTY Director Sturdevant. “Farmers are already driving their combines through 85 to 90 million acres of corn every year, with the cobs going to waste in the fields. By working with farmers and equipment companies to collect those cobs, we will boost the ethanol produced from the same land, and create an additional revenue stream for farmers and equipment companies. We’re working hard to make this profitable for everyone.”
And the cob won’t just be used to produce ethanol. The waste stream from the cellulosic process will be used to power both the cellulosic facility and most of the grain-based facility.
So what does removing the cob do to the value of the soil?
POET continues to research the effects of removing the cob from the soil. Partnering with Iowa State University they conducted a study that reaffirms that removing cobs has no substantial impact on soil nutrient content. It was found that cobs contain only 2-3 percent of the measured nutrients of the above-ground corn plant. So what’s it like, harvesting corn cobs?
“I never dreamed of anything like this,” says Board Member Brownlee. “But it seems to work, and it’s kind of exciting.”
Brownlee’s operation is using a cart which pulls behind the combine to collect the cobs. The cart can unload on the go into another cart which then dumps them at the end of the field for later pickup. He states that that system is working pretty well for him, but that he has also heard some good feedback from growers who are using a different system that bales their cobs.
Todd Mathisen is having generally good results using a comparable system, and says while he never envisions cobs challenging corn for profitability, it’s nevertheless been very worthwhile.
“The government incentives make it easier for farmers to buy the equipment,” says Mathisen. “When you add the incentive per acre from the government to what you get from the plant, it makes it work well.” Mathisen says there’s some skepticism among some farmers that the cobs actually have value, and that it’s going to take some time for people to get used to the idea.
“As we harvest more and more, it will just become part of what we do,” says Mathisen. “Farmers need to be open-minded and realize it’s a real doable project.”
Supporting Ethanol From Farm and Statehouse
As both a farmer and a state senator, Jack Kibbie has been a strong supporter of ethanol.
“It wasn’t that long ago that corn was selling for under $2 per bushel and everybody was making money off of it except the guy that raised it, and the government was keeping him alive,” recalls Kibbie. “But ethanol changed all that.”
Kibbie has seen the benefits of ethanol first-hand since POET came to Emmetsburg. He has sold corn to the plant, utilized distillers grains as feed for his cattle, and this year his two sons are boosting the farm’s income by harvesting corn cobs.
He has also backed legislation supporting renewable fuels in the state senate, and has likewise seen the benefits to his state and the Emmetsburg community.
“It’s been a wonderful thing,” says Kibbie. “I wish Project LIBERTY all the luck in the world, I think it’s a great thing for our community. I don’t know of anybody who’s not supportive.
Aiding the Cause
Building a cellulosic facility is no small feat, physically or financially. Millions — yes, millions — of dollars are needed to complete a facility of this capacity. Planning, research and construction dollars are needed over several years. And with a large goal in mind, POET was not the only one who realized the importance of this effort. Recognizing the impact Project LIBERTY would have on the state of Iowa and our nation’s energy independence, others wanted to contribute to the project as well. Here’s a little run down on how POET will be aided to make Project LIBERTY a reality.
DEPARTMENT OF ENERGY (DOE)
In February 2007, DOE notified POET of its ‘selection for negotiations’ and was awarded a grant for a maximum DOE contribution of $80M. POET will cover at least 60 percent of the project with DOE’s contribution at most 40 percent.
The grant was split into two agreements: a Cooperative Agreement with a total budget of $9.6M ($3.8M from DOE) and a Technology Investment Agreement with a total budget of $193.8M ($76.2M from DOE) were both signed on October 1, 2007.
In June 2009, DOE and POET negotiated a plan to incentivize farmers and equipment companies to accelerate the cob harvest process. This resulted in a $20M increase from DOE to the LIBERTY project (bringing the total DOE contribution for LIBERTY to $100M — the maximum allowed for one project). POET again will cover at least 60 percent of the project with DOE’s contribution at most 40 percent.
With this incentive program, farmers will be helped with the purchase of cob harvest equipment.
BIOMASS CROP ASSISTANCE PROGRAM
The Biomass Crop Assistance Program is a new program administered by the USDA Farm Service Agency and authorized under the USDA Farm Bill.
The program is helping incentivize biomass producers to collect, harvest, store, and transport biomass.
Producers may receive matching payments ($1 for $1 match up to $45 per dry ton) for selling eligible biomass to USDA-approved biomass conversion facilities.
POET will assist producers in applying for BCAP funds.
The DOE incentive will assist producers with cob harvest equipment procurement; BCAP will augment funds received from the sale of biomass to LIBERTY.
IOWA POWER FUND
In September 2008, POET and the State of Iowa negotiated Iowa financial assistance for Project LIBERTY in the amount of $20M.
The assistance was broken into two agreements, one with the Iowa Power Fund (IPF) Board and one with the Iowa Department of Economic Development (IDED).
The IPF agreement is for a maximum contribution of $14.75M and was signed in February 2009; of the total: $5M is assistance for preliminary engineering and feedstock development, and $9.75M is for assistance with construction.
The IDED agreement is for a maximum contribution of $5.25M and is currently in final negotiations; the assistance will be in the form of tax credits, tax refunds, training fee credits, and grants.