SUMMER 2010 ISSUE


It’s Here



Commercial scale cob collection, new revenue for corn farmers, the reality of cellulosic ethanol… is here.




From new corn cob collection equipment to promising new soil studies to the fast-approaching groundbreaking for Project LIBERTY, the cellulosic ethanol industry is in the midst of its most progressive and productive period.


For Doug Karlen, a Supervisory Soil Scientist and Research Leader for the USDA, the last few years have been the most exciting and optimistic he’s ever seen for biomass. Karlen speaks from experience — he’s been involved in cellulosic research for 30-plus years.


“It’s truly a wonderful time in biomass,” Karlen says. “Many different groups are partnering together and making real progress toward making cellulosic ethanol commercially viable. This kind of venture requires the cooperation of the federal government and the state government and private industry, and that is happening. We are changing the way we do business and it’s for the good of the world.”


On the industry side, POET is leading the way through its collaborative development of new agricultural equipment, POET-driven research studies, and what could soon be the first commercialscale producer of cellulosic ethanol — Project LIBERTY.


NEW ERA


This fall, POET Biomass plans to collect the first commercial-scale harvest of corn cobs since the modern combine.


“It’s a very exciting era,” says Mike Roth, the Director of Biomass at POET. “We’re talking about new revenue for the farmer from corn cobs, a product they currently grow that they’re just slinging back onto the fields. This is probably the first large-scale value add of cobs since the first growth of corn.”


The 2010 cob harvest, a projected 70,000 tons of corn cobs from farmers in the Emmetsburg, Iowa area, will be gathered in preparation for the opening of the Project LIBERTY plant in 2012.


While the cob collection plan has been in place since POET unveiled Project LIBERTY in 2007, that process has been made even more effective by equipment developed in a collaborative effort between POET, the agricultural equipment manufacturers, and, most importantly, the farmer.


“At the end of the day, we want cobs and we’re going to help the farmer collect cobs in the most efficient and economical way possible. Project LIBERTY is upon us and it’s not slowing down,” adds Roth.


NEW STUDIES AND GROWING OPTIMISM


“Regardless of what you’re going to do,” says Karlen, “the most important thing is to take care of the soil first.”


And the recent results of the Emmetsburg Soil Study, co-authored by Karlen and Iowa State University’s Stuart Birrell, show that the removal of corn cob and stover — if done using a good soil management plan — can actually help increase crop production, soil quality and nutrient levels.


“We’ve always believed that as corn yields continue to increase, and the seed population goes up, the farmer will want to remove more residue from the field,” says Roth. “We are asking the farmer to remove no more than 25 percent of above-ground residue, and that still leaves considerable amounts for erosion control and for putting soil organic carbon and nutrients back into the ground. The nice thing is that we’re all on the same page, and able to tell the farmer that this is a sustainable activity for your soil.”


EXPERT ADVICE


While Roth notes that POET has spent considerable resources over the past three years in partnering with agricultural equipment companies to test equipment he’s quick to point out that it’s the farmers who have played a major role in the process.


“This has truly been a collaborative effort with the manufacturers and the farmer, who is the real expert here,” Roth says. “This is new technology for people in a tradition-based occupation. These farmers understand that this not only adds value to their farming operation, it also helps reduce greenhouse gas emissions and helps us work toward energy independence. These small advancements can change the world.”


Eric Woodford understands firsthand how far biomass equipment has advanced. As a full-time farmer in Redwood Falls, Minn., Woodford also ran a cornstalk baling business that annually produced up to 20,000 second-pass bales for livestock feed and bedding.


Woodford modified his Vermeer baler for his side business, and eventually invented the powered windguard, a piece of equipment that he describes as “like a turbo charger for a baler.”


“It nearly doubled the tons collected per hour,” he says. “Not only does it increase productivity, it also prevents plugging and allows the operator to continue looking forward without constantly monitoring the baler.”


Vermeer bought Woodford’s invention, and the attachment has now been on the market for two years. In April, Woodford and his family moved from Minnesota to Emmetsburg, Iowa, where he opened Woodford Equipment, a Vermeer dealer specializing in machinery for the cellulosic ethanol industry.


“One of the things that people don’t truly understand about cellulosic ethanol is how much economic development it can create in small communities,” he says. “Just look at what POET has done in Emmetsburg. Every community with an ethanol biorefinery could potentially see this kind of development with equipment dealerships sprouting up and adding employees. That’s just the tip of it. Once people start buying equipment they’re going to need supplies and materials and it’s really going to do a lot for economic development across the rural areas of the nation.”


Woodford has backed up his belief in biomass through not only inventions, but action.


“My family has pulled up roots three generations deep because of our commitment to cellulosic ethanol,” Woodford says. “We have faith that it will have positive benefits on society. That’s our level of confidence. We’re willing to change our life for it.”


NEW HAPPENINGS AT PROJECT LIBERTY


But biomass collection is only a small part in the scale of Project LIBERTY.


“Many things are moving forward for us at the same time,” says Jim Sturdevant, Director of Project LIBERTY. “With a project of this size and magnitude, and with so many partners involved, it’s important that we all keep moving forward on all fronts.”


Project LIBERTY, POET’s cellulosic initiative in Emmetsburg, Iowa, is slated to open in 2012. The facility will turn corn cobs into 25 million gallons of cellulosic ethanol per year.


Earlier this year, the project received a commitment of $5.25 million in financial assistance from the Iowa Department of Economic Development (IDED), which brings Iowa’s total commitment up to $20 million since 2009.


“Iowa has definitely been a leader in biofuels, and is actively supporting research and development of new sources and production methods of biofuels to efficiently fuel the world,” says Kay Snyder, Communications Director for the IDED. “We feel the work POET is doing can have a very positive impact on the future of biofuels and meeting our energy needs for the years to come.”


Sturdevant points out advancements in two specific areas — reducing costs and the harvesting and transportation of corn cobs — as examples of tangible progress at Project LIBERTY.


“We have reduced costs by 40 percent since we starting making cellulosic ethanol at our South Dakota pilot plant in November 2008,” Sturdevant says. “And we’re still working on ways to save even more.”


New corn cob collection equipment is just one of the advancements for harvesting and transportation of biomass.


“We’ve worked with about 20 agricultural equipment companies and dozens of farmers over the past three years to find the most efficient and cost effective ways to harvest and transport corn crop residue, mostly corn cobs,” Sturdevant says. “We’ve made tremendous progress on that front mainly through experience and hard work and partnerships with others.”


Sturdevant stresses POET’s relationship with the farmers as a driving force for advancement.


“Farmers are some of the most creative people on the planet,” Sturdevant says. “Once we get a commercial scale plant like Project LIBERTY up and running, we will continue to improve on every aspect of the project including how we collect the biomass, and farmers will help drive the most cost-effective ways to do that. What will go on inside the facility will be improved practically on a daily basis.”


Birrell, an Associate Professor and Researcher at Iowa State University, also predicts rapid advancements once a plant like Project LIBERTY gets up and running.


“As soon as there is a single viable economic refinery and collection method, there will be very fast advancements because then farmers know there is a true market they can sell to,” Birrell says. “Agriculture is extremely quick to compete.”


“People and organizations from federal and state governments and universities and many different industries have come together for Project LIBERTY,” Sturdevant says. “It’s very gratifying to see what can be done when diverse organizations pull together toward a common goal. When we do that, we can make the world a better place.”


And, he says, a safer place.


“It’s estimated that 60 percent of the nation’s transportation fuel needs can be met by cellulosic ethanol,” Sturdevant says. “It turns out we import 60 percent of our oil from other countries, some of which aren’t very neighborly. It becomes a national security issue.”


LONG-TERM PROJECTIONS


The short-term advancements for cellulosic ethanol look positive, and the long-term projections not only build on that momentum, but take it to a new level that puts POET at the forefront of the future of biomass.


“By 2022, POET plans to be responsible for 3.5 billion gallons of cellulosic ethanol production,” POET CEO Jeff Broin told the National Press Club in April. “To put this in perspective, 3.5 billion gallons is over 20 percent of the cellulosic ethanol mandated in the Renewable Fuel Standard — a program designed to reduce greenhouse gases, reduce petroleum imports, and develop and expand the renewable fuels industry.”


That 3.5 billion gallon goal is based on a projected 1 billion gallons from adding technology to POET’s 26 corn-based ethanol biorefineries and new plants like Project LIBERTY; 1.4 billion gallons from licensing technology to other corn-based ethanol producers; and 1.1 billion gallons from other forms of biomass across the country which will be produced by POET and through joint ventures and other opportunities.


Broin also said that overcoming a few policy and financing hurdles will be necessary to reach POET’s goals.


“In order for this vision to become a reality, policy makers must provide access to the market and the stability needed to attract the large amount of capital that will be required to finance its construction,” Broin said.


On the financial front, POET is hoping for a prompt approval of its application for a loan guarantee from the U.S. Department of Energy, which would keep the company on schedule and kickstart construction on the Project LIBERTY plant.


If those long-term projections do come to fruition, those 3.5 billion gallons of cellulosic ethanol would translate directly into jobs and agricultural income. The DOE estimates that 1 billion gallons of ethanol production creates 10,000 to 20,000 jobs. Recently, the EPA projected that, by 2022, crops grown for biofuels would increase farm income by $13 billion.


“This is a lofty goal, but it is achievable,” Broin said. “If we can put a man on the moon in less than a decade, a country as great as ours can meet this challenge as well. But we first need to take the first step. At POET, we are ready.”


DREAMS TO REALITY


For longtime USDA researcher Karlen, the future of cellulosic ethanol is now.


“Project LIBERTY is certainly a major advancement in the opportunities to meet multiple demands,” he says. “It’s an advancement for all of agriculture, and it’s rekindling an excitement in the rural communities.”


“I started my research career following the first energy crisis in the 1970s,” Karlen says. “And as long as I can remember we’ve been hearing that large-scale cellulosic conversion is five years away. You can go to the 1978 ‘Yearbook of Agriculture’ and you’ll find an entire article talking about how we’re five years away from conversion. Well, five years away looks like it’s finally here.”


THREE OPTIONS FOR COLLECTION


1. FIRST PASS COBS


Early this year, the first commercial corn cob collection unit hit the market.


“This is definitely a groundbreaking piece of equipment,” Roth says. “It is a cart towed behind the combine that collects first-pass cobs before they ever touch the ground. It’s additional work, but also yields additional revenue, and we’ve been able to demonstrate to farmers the value they will recognize from that effort.”


2. FIRST PASS BALES


Another new piece of equipment, a first-pass baler, is close to hitting the commercial market. Similar to the first-pass cob collection unit, the first-pass baler will be towed behind the combine to collect and bale cobs and some MOC (material other than cob) before any of it touches the ground.


“This technology is very close to commercial reality,” Roth says. “There is already some very good baling technology and the manufacturers have been working with Emmetsburg-area farmers to test the equipment. It’s another new development that gets us closer to turning cobs into fuel on a large scale.”


3. SECOND PASS BALES


Recent research shows that a harvest method long familiar to farmers can be used for cob collection. Second-pass baling, in which the farmer can go back and bale cobs and other material after harvesting grain, has proven viable for corn cob collection without any negative effect on the land.


In addition to currently being the most popular cob collection method for farmers, recent research by Iowa State University estimates that second-pass baling, or any of the three methods, “will not require any drastic changes in fertilizer management for producers.” The second-pass bale method removes roughly 1 ton of material per acre, less than 25 percent of the stover (cobs, husks, leaves and high-cut corn stalks) per acre and well within the numbers for responsible soil management for non-highly erosive areas.





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