The nation's top ethanol producer, Poet LLC, announced this week that its pilot cellulosic ethanol plant in South Dakota should begin producing fuel from corn cobs and fiber by the end of this year.
To commercialize the technology, Poet plans to expand its Emmetsburg, Iowa operation to produce 125 million gallons of ethanol annually by 2011…25 percent of which will be made from corn cobs and fiber.
The U.S. leads the world in ethanol production, while Brazil tops the charts in exports of the biofuel. But Brazil relies on sugar cane as its dominant feed stock, while the vast majority of U.S. ethanol is made from corn.
A small amount of ethanol is made from "other" sources. In Colorado, two companies have made the connection between 16 million barrels of beer and a gallon of gasoline. David Miller explains.
The connection between one of the nation's largest brewing companies and automobile fuel may not be readily apparent. But the Coors Brewing Company is making the connection by turning a waste stream into a revenue stream.
Rick Paine, Coors Brewing Company: "...it really was that continual drive of Bill Coors about ya know it's another waste that could be a resource that's out of place"
Rick Paine, the Coors Brewing Company's Co-Products Manager, is talking about the former CEO and Chairman of the Board, Bill Coors. And in this case, the resource out of place was the waste from the 16 million barrels of beer produced each year at their Golden, Colorado facility. Coors now is taking this former waste product and using it to make 3 million gallons of fuel-grade ethanol per year.
The plant making this conversion is located on the grounds of the largest single-site brewing operation in the world.
Paine, who has been employed by the nation's third largest beer brewer for more than 35 years, is excited about the project.
Rick Paine, Coors Brewing Company: "This is a fabulous opportunity. Ya' know it's good for the environment, it's good for the community, it helps us out, it puts money in both companies pocket."
The Coors Brewing Company has essentially been brewing ethanol in one form or another since 1873 but it had never continued the fermentation process to 100 percent ethanol until 1996.
For Coors, the journey from beer brewer to ethanol producer was somewhat circuitous. It begins in the early 90s when new provisions in the Clean Air Act mandated a reduction in Denver's smog levels. Those regulations required all gasoline sold in the area to be blended with some kind of oxygenate. The top contenders were the now banned methyl tertiary butyl ether, or MTBE, and ethanol.
At the time, petroleum processors were looking for ready sources of ethanol. Finding some way of utilizing the leftovers from Coors' was briefly considered. After some investigation by the Aurora, Colorado-based Merrick and Company, a technical professional services and engineering firm, the petroleum refiners determined it would be difficult to make a profit and dropped the idea. Merrick saw an opportunity and approached Coors.
Steve Wagner, Merrick and Company: "In order to make it really work and be economic we had to do it here at the brewery. Well, the petroleum company at the time wasn't about to operate a refinery unit, which this is, in the brewery and Coors was not about to get into the fuel business. ...we stepped up as the engineers and built a plant and own and operate it."
When Merrick came on the scene, Coors was already recovering and drying the leftover yeast for sale to Purina as a pet food additive. In 1996, Merrick attached the first distillation tower to the yeast recovery facility and opened for business. In 2005, after 9 years of operation, Merrick doubled the size of the plant by adding another distillation unit. So far, Merrick has invested $6 million in the operation.
Steve Wagner, Merrick and Company: "Well, this is certainly something that we can all be proud about because it's recycling, you know, it has economic benefit, it has an environmental benefit, it is cost savings, improves efficiencies. It's something to be proud of, yes. And, of course, it makes money."
Merrick owns the infrastructure, leases the land from Coors, and handles all permitting. In exchange, Coors provides all the spent brewer's yeast, waste beer from the production line, expired keg beer returned to the plant, and seasonal over-production for processing into ethanol at no charge to Merrick. Anything leftover is sent to the companies waste water treatment plant. Each gallon of the new brew costs only 60 cents and the revenue from sales is split between both companies.
Only 7 of the more than 3000 people employed at the Golden brewing facility are needed to handle day-to-day ethanol production. Merrick does not have a full-time employee at the plant but is responsible for maintenance and repairs.
According to Merrick's calculations, the plant annually reduces Coors release of volatile organic compounds by 70 tons and puts 20 million gallons of clean water back into Colorado's water supply.
The finished product is sold to Valero Energy Corporation, an independent petroleum refiner, that blends the ethanol and distributes it to Sinclair and Diamond Shamrock stations on the Colorado front-range.
Rick Paine, Coors Brewing Company: "The reason I trade at Diamond Shamrock, and in the Sinclair Stations, is because I know that some of our product and my work and my folks work is in that tank."
And Coors has plans to further process the brewer's grains when it determines the move would be profitable. Until market forces and partnerships allow, the barely malt, hops, and other grains are being sold as cattle feed.
For the time being, Paine is content to continue living up to Bill Coors' adage of waste being a resource out of place and, with apologies to Pete Coors, the current CEO...
Rick Paine, Coors Brewing Company: "... it's great time to be here and if we can move forward with what we're doing with the ethanol and the potential of bio-mass we can really re-invent and we might be an ethanol plant that just happens to make beer. Now don't tell Pete that..."
For Market to Market, I'm David Miller