Carbon dioxide sources and ethanol: second in a Biofuels Digest series on CO2 markets

Carbon dioxide merchant sources are primarily supplied by ethanol by-product in the united states

INTRODUCTION
Carbon dioxide has unique properties, one being sublimation from a solid (as dry ice) at atmospheric pressure to a vapor; thus creating the ‘fog effect’; however, under a variance of pressures, carbon dioxide is then a very cold a liquid; thus the cryogenic property. As to the unique nature of the CO2 phase composition, the same unique qualities lend to a wide range of applications in industry, generally defined as the merchant market. Subsequent articles will discuss CO2 applications however; this discussion is largely on the subject of sourcing CO2 supplies from ethanol projects.

ETHANOL IS KEY TO MANY CURRENT AND FUTURE DEVELOPMENTS IN THE CO2 INDUSTRY
Liquid CO2 as a merchant product is stored at the production plant site, as well as at the customer’s site; and CO2 is hauled via tanker trucks, rail cars, or barges under pressure, as a liquid material. Raw CO2 from fermentation processes is a saturated gas, at low to atmospheric pressure when leaving the ethanol plant. From this point forward, CO2 is either vented to the atmosphere, sequestered in some manner, or liquefied and purified for the merchant markets; or dry ice is manufactured.

The lion’s share of CO2 which is recovered, liquefied, and purified is generally directed to the merchant markets, and perhaps some tonnage will go to the service of enhanced oil recovery. Please see diagram 1, as a CO2 phase illustration, indicating phase with respect to temperature and pressure.

Since ethanol is a high-octane fuel which is used primarily as a gasoline additive and extender, and CO2 is a by-product of fermentation processes, ethanol industry status and growth is of major interest for all carbon dioxide markets and environmental projects. In terms of the 2007 global production of ethanol, this was about 35 billion gallons in capacity. Corn – based ethanol accounts for 97% of the market in the U.S, while Latin America produces ethanol primarily from sugarcane and molasses; and Brazil is the star in ethanol plans from sugarcane and biodiesel project expansions and current capacity. Ambitious plans for ethanol now exist in the Philippines, with mandated blends on the rise. Four feedstocks, including sugarcane which should be the feedstock for the growing ethanol mandated usage and production on mainly four islands in the Philippines, and of course in Brazil with sugarcane. All of this is particularly important with respect to developing the CO2 industry further, in terms of applications for the product, and use for oil recovery whenever possible. Plans for CO2 sequestration or carbon management programs are essential on a long term level, from all of today and tomorrow’s fermentation projects globally.

In the United States, about 30% of the existing CO2 plants for merchant service are sourced from by-product of ethanol; and most of the new CO2 projects in North America are to be sourced from ethanol. The scale of ethanol economics and plant size has grown from 20 million gallons per year some years ago, to a usual 50 – 100 million gallons per year, which represent > 400 – 800 tons per day in raw CO2. In terms of capital investment, the facilities now can range (with liquid on site storage, civil work, building storage, and scales; turn key basis) from USD $11 million for the 400 TPD plan to $17 million for the 800 TPD plant. Quite a number of new CO2 plants of the larger size are slated for the developed world; and more to come, all mostly from ethanol. This is despite the negative rhetoric surrounding grain utilization. Grain supplies and high prices of are almost entirely driven by high energy prices; that being the oil industry reaping record profits, such as that of Exxon Mobil and Chevron recently announcing their second quarter profits. The grain based ethanol market, and project developments will, in any event, continue to expand domestically, and internationally, which will gain more momentum once the capital markets improve and the misinformation surrounding grain and food prices becomes clear; and of course, the price of oil declines further. These statements are relevant to this article, since much of today’s domestic and international merchant CO2 production is driven by the production of ethanol.

The ethanol industry has been the only saving grace toward an energy independent future for the United States, and the key to most of America’s new CO2 projects for many years. Some of today’s troubled economic criteria such as unreasonable commodity prices, oil prices, and capital availability will return to a more reasonable level in due time, and in some cases have already eased somewhat, hence a surge, once again in ethanol project developments will precipitate, as well as new CO2 source opportunities, (and) or a need for CO2 sequestration from ethanol. All of this is relevant and important on the carbon dioxide front, that being a need to plan for recovery in the CO2 industry, to replace lost sources from other sectors, such as a planned divergence of practically all the CO2 from Mississippi’s Jackson Dome, which will be taken from several merchant plants operated by the major and independent firms to strictly EOR (enhanced oil recovery) service. This means that primarily oil and gas concerns own the vast CO2 reserves in Mississippi, and have been selling this product to the CO2 firms over the years for the merchant markets. This tonnage, short of one player, will be diverted strictly for use in enhanced oil recovery in the Middle South US. The change from merchant supply, to strictly EOR, in the Jackson Dome region will take place as the contracts come due for renewal. The ethanol industry is probably the only entity with the potential and the slated or planned capacity for supplying replacement carbon dioxide to this region. Moreover, strategic needs in regions of the U.S. which are unaffordable for transporting CO2 from distant points of supply are relying on the development of merchant CO2 from ethanol. The other factor to consider is sequestration of CO2 from the ethanol plants which do not recover and displace CO2 in merchant use; and this will have to be a key part of emissions planning over the years ahead. All is relevant and key to the ethanol industry.

Grain based ethanol projects are now the source for several new CO2 plants under construction or development in the US today. Despite the unfounded negative rhetoric surrounding grain use in ethanol, the CO2 plants, sourced by grain based ethanol production, will be built and operated in any event; thus long term, feasibility remains. On the other hand, in various global markets, feedstock materials beyond corn are available as alternatives of a more affordable nature, such as sugarcane, for merchant CO2 production. As discussed in this article and others, all materials including grain, cellulose based materials; plus sugarcane, and sweet sorghum, and much more will be the source for today and tomorrow, with respect to carbon dioxide by-product from fermentation.

ETHANOL BASED CO2 SOURCES HAVE CHANGED SIGNIFICANTLY OVER THE LAST FEW YEARS

Ethanol has moved into the spotlight in terms of CO2 sourcing, over the last few years in the United States. Many years ago, and into the 1990s, anhydrous ammonia by-product was a major raw feedstock type, at that time about 40%; and at the same time, ethanol was less than 20% of the total CO2 feedstock supply. The role of anhydrous ammonia as a feedstock today v. ethanol has reversed roles; and the table below illustrates today’s feedstock used for the merchant markets. As this shows, 33% of this total is ethanol; and since this survey was taken, more plants using CO2 production from ethanol have been planned or completed; therefore this 33% value has grown. With respect to new U.S. CO2 projects which will use feedstock other than ethanol, only one of several new facilities will be sourced from a reformer in an oil refinery. Whether the grain based ethanol projects provide a huge growth factor as feedstock CO2 for the carbon dioxide industry, or the second generation developments from ethanol are the more likely direction from where we see new CO2 sources; ethanol will remain dominant, in any event, with respect to the primary avenue for new and existing CO2 projects in the United States. This will be the case in many other world markets as well.

Table 1 – % raw feedstock from various chemical and allied sources for the merchant CO2 industry
————————————————————————————————————
Source Type                    % of Total
————————————————————————————————————
Anhydrous Ammonia                20
Reformer                    20
Ethylene Oxide TiO2, other chemical        6
Natural Wells, HC Separation            19
Ethanol                     33
Flue Gas                    2

(Source: Advanced Cryogenics, Ltd.)

SUMMARY
On the subject of ethanol, given all of the above stated concerning growth, feedstock type, emissions issues, grain shortages for food v. feedstock for fuels, and second generation ethanol; the subject is ever more vitally important to the CO2 industry, and will continue to be such. In terms of growing, current, and planned ethanol projects, and government mandates as a fuel additive or replacement; CO2 by-product should be recognized as a source of revenue. Despite the method of designing this form of CO2 revenues from ethanol projects, it should become more important as we strive to source (due to high transportation costs) closer to the markets; as well as recognizing developments of emissions mandates.  It is essential to understand CO2 markets, production costs, competition and sourcing developments – plus strategic sourcing; in order to best define and receive the benefits for properly developing the CO2 from ethanol projects. All by-product revenues are essential for long term health of the ethanol industry; and can be the key to best sourcing from a strategic and economic point of view the CO2 industry’s need. Today, in particular, when considering ethanol’s tight margins; properly developing and understanding the CO2 project can mean a significant monetary difference to the overall economic well being of the ethanol project.

About the author:
Sam A. Rushing is a chemist, and president of Advanced Cryogenics, Ltd., a CO2 consulting practice. The business is supported by 30 years of merchant and diversified carbon dioxide consulting work of a process, technical, applications, markets, and business nature. Please contact by e-mail, or call on the subject of carbon dioxide. e-mail rushing@terranova.net Tel 305 852 2597 www.carbondioxideconsultants.com

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