Thinking outside the box: ethanol production in the next millennium 1

Chapter 1

Thinking outside the box

Ethanol production in the next millennium: processors
of raw materials, not just ethanol producers
T.P. Lyons
Alltech Inc., Nicholasville, Kentucky, USA

Shifting perspectives on our industry fermenter, so it can produce ethanol at its

maximum rate. Antinutritional factors such as
As our industry moves into the next millennium, phytic acid and mycotoxins must be considered.
it – like all industries - must make changes. The Just because a process was designed around
21st century will not be business as usual, but certain levels of backset does not mean that it
rather business at the speed of light. Enterprises, remains the best system.
whether they be distilleries or not, must be Thinking outside the box also means using
capable of responding quickly to avail themselves spreadsheets to objectively measure effects of
of new opportunities, new challenges and new change on productivity and profitability. ‘What
technology. if?’ should be the by-word. Whether we are using
Few industries are as conservative or as molasses or grain, new uses of so-called by-
protective as the distilling industry. This is products must be found. It is not sufficient to
exemplified by the rules dictating that only whisky simply sell distillers grains as a commodity, nor
produced in Scotland is Scotch, or that tequila to accept spent molasses as a waste needing to
can only be produced in certain areas of Mexico. be got rid of. The future is for those who find or
Even our whole approach to sugar extraction develop new markets for these materials. We
and fermentation is conservative. must think of ourselves as processors of grain,
Distillers cling to the age-old processes for sugar beets, cane, etc., not just alcohol producers.
good reasons where marketing is concerned,
but for poor reasons where technology and
processes are concerned. Many plants run 5- The potential for ethanol
10% ethanol in the fermenter, yet yeast can
tolerate as high as 23% ethanol. Most distillers All of this requires education of operators,
consider alcohol to be their primary product marketers and management as to the possibilities.
rather than one of a number of products. The All of this will require more and more research.
future, however, will be for companies who think It is disheartening to note how little research is
‘outside the box’ and who look to changing their currently underway in our industry. When one
business perspectives. They are processors of considers the growth of the industry over the
grain, not alcohol producers. They must focus last few years we cannot but be impressed
on increasing yeast’s performance in the (Figure 1). In the United States, ethanol prod-
2 T.P. Lyons

uction has grown to over 1.6 billion gallons produced and the vast majority were produced
annually. In 1998, nearly 10 billion bushels of by fermentation - 93% or 29 billion liters (7.8
corn were harvested (>250 million metric tons). billion US gallons). The major feedstocks used
Over 5%, or 500 million bushels were converted to product this alcohol were sugar crops such
into ethanol. This is about the same percentage as cane and beet sugars, accounting for 60% of
of the nation’s corn crop used to produce high the major ethanol producers, i.e. Brazil, and corn
fructose syrups (Andreas, 1999). in the US and Europe (Table 1). The total ethanol
When one considers that the oxygenate capacity of Russia is estimated to be 2.5 billion
MTBE (methyl tertiary butyl ether) is expected liters with beverage alcohol accounting for 60%
to be either substantially reduced or eliminated of this. Political changes are also ocurring that
from gasoline, then our industry has an excellent will alter these figure dramatically. In Brazil the
future. In the United States demand for finished highest production of ethanol was in 1997 when
motor fuel is around 120 billion gallons annually output topped 16 billion liters. While a surplus
(Miller, personal communication). If MTBE is existed in 1998, the government has now
removed, then there will be a 4% shortfall to be introduced ‘green fleets’ and blending of
replaced. Ethanol, with an octane of 113 anhydrous alcohol (5%) into diesel fuel to take
compared to the octane booster MTBE of 109, care of this. In Europe there has been much
is one of the few ways that a gasoline producer discussion about Bio-Ethanol; but only recently
can achieve this high octane rating. Furthermore, have there been tangible results. The long-term
high octane gasoline always commands a higher goal is a 12% share for renewable fuels with
price at the pump. biofuels playing a major role. Despite
Furthermore, the US Clean Air Act insists that concessions, progress has been slow. France has
an average of 2% oxygen be present in been leading the way. A French law dating back
reformulated gasoline (RFG), which represents to 1987 allows the blending of 3-15% organic
about 30% of the US gasoline market. Pure oxygenated compounds (3% for ethanol, 15%
ethanol, contributing 35% oxygen, could clearly for ethers such as ETBE). In November of 1996,
provide this 2% oxygen if it were used at 5% of a draft bill on clean air makes use of oxygenated
the RFG. However if that were to happen, components mandatory by 2000; and the
ethanol production would not be 1.4 billion powerful French farm lobby are pushing for
gallons, but rather 3-4 billion gallons (Miller, ethanol to be included in gasoline at 2%. This
personal communication). would require almost 0.5 billion liters. Seven self-
Nor is alcohol production limited to the US. contained distilleries with a combined capacity
In 1998 some 31 billion liters of ethanol were of 82 million liters/day and 16 integrated sugar

Figure 1. Fuel ethanol production in the US 1980-1998 (from Energy Information Administration and Renewable
Fuels Association).
 Thinking outside the box: ethanol production in the next millennium 3

and alcohol complexes will be easily able to types of spirits (Figure 2). In the first step starch-
supply that amount. containing raw materials must be liquefied so that
dextrins and subsequently fermentable sugars
Table 1. Geographic distribution of the majority of can be obtained. Other raw materials such as
fermentation alcohol (fuel, industrial and potable).1 molasses and whey have sugars pre-formed or
Country Production their extraction may be taken care of in the
(billion liters) Raw material ‘cooking’ process such as agave. The sugar will
Brazil 14.0 Sugarcane, beets
in all cases be passed over to the workhorse of
United States 5.3 Cereal grains all distilleries – yeast. This microorganism, the
(mostly corn) world’s most heavily used microbe, converts
Europe 4.3 Cereal grains, beets sugars to ethanol and caron dioxide. The ethanol
Russia 2.5 Cereal grains, beets content, which can be as much as 23% but in
Total world practice is 10-13, is then concentrated. At this
production 28.0 point the chemical engineer takes over from the
1
Berg, 1999. biochemist as the beer moves toward distillation.
Even with the disillation some classification of
The future of ethanol is thus very positive and spirits can be made. The rums and malt whiskies
does not depend on subsidies. A 1997 study by from pot stills; gin, vodka, fuel and industrial
Dr. Michael Evans of the prestigious Kellogg alcohol from continuous stills.
School of Management at Northwestern Further classifications of the process occur
University concluded that the net effect of when we decide whether to mature the distilled
ethanol production was a reduction in the US product. As noted in the chapter on American
federal budget deficit (Table 2). This is brought whisky, bourbon must by law be aged for a
about by increased tax revenues due to increases minimum of one year in charred white oak
in personal income from wages and salaries, barrels. This opens up an opportunity for the
higher farm income, more corporate tax revenue Scots and the Irish, and indeed for the rum
and declining unemployment compensation manufacturers, who use barrels that once carried
payments. bourbon and use them for a further three years
to store and mature their own Irish whiskey, malt
Table 2. Impact of ethanol production on the US whisky, or Scotch grain whisky. The rum and
federal budget1. tequila manufacturers, unlike the Irish and Scotch
whisky producers, also age their product in
Revenue source Million US$ barrels, but not for such a long period. Rum is
Personal income taxes from wages commonly matured for 1-2 years; although many
and salaries 532 fine rums are aged for up to 12 years. While the
Personal income taxes, farm income 675 bulk of the tequila sold is not aged; regulations
Social security taxes 1608 defining aged tequilas call for Reposado to be
Decline in unemployment benefits 561 aged at least one month while Añejo must be
Corporate income taxes 846 aged for at least 12 months.
Less the ethanol tax incentive -648
Net savings to the federal budget $3,574
1
(adapted from Evans, 1999) Recovery of by-products

As we review our overall process, it is obviously

The alcohol production process critical that we maximize utilization of by-products.
In the production of spirits, assuming the
The alcohol process has a number of steps that feedstock is corn, the major cost factors are the
enable us to differentiate among the various raw material, energy, enzymes, processing
4 T.P. Lyons

Figure 2. Beverage alcohol feedstocks and products.

chemical cost (water treatment, etc.) and labor. many new products built around DDGS. This is
Much of these costs can be offset with 17 lbs of the subject of a separate chapter in this volume.
distillers grains coming from each bushel of corn; Therefore, as we move forward to improve
but we must maximize the return on this essential the value of distillers grains and derived products,
product. At the time this book was printed, a continual emphasis on yield (while still very
distillers grains were selling for around $80/ton important), would not be as critical. Perhaps in
while corn, at under $2 per bushel, is at an all the future distillers grains and other derived
time low – as is distillers grain. At 4 cents per lb products will, and indeed should, be the single
($80/ton), this 17 lbs of DDGS gives us a credit most important raw material from a distillery.
of 68 cents. This 68 cents is set against the $2 After all, they are rich and valuable proteins, a
bushel of corn or the 3-4 cents for enzymes. If commodity in very short supply across the world.
on the other hand, new or novel products could The chapters in this book we hope will help
be made from distillers grains, (i.e. improved you realize the complexity and at the same time
bypass proteins for cattle, pre-hydrolyzed DDGS the simplicity of the process of converting sugars
for fiber use in human applicatoins), the financial to ethanol. If we make your search for
impact would be substantial. The future will see information just a little easier, we will have
 Thinking outside the box: ethanol production in the next millennium 5

achieved our objective. If we can encourage Berg, C. 1999. World ethanol production and
more research, then we will be well-rewarded. trade to 2000 and beyond. World Ethanol
Report.
Evans, M.K. 1997. The economic impact of of
References the demand for ethanol. Report to
Midwestern Governors Conference. Lom-
Andreas, M. 1999. A global perspective. In: The bard, IL, February. (cited by the Renewable
1999 International Fuel Ethanol Workshop Fuels Association).
and Trade Show. Cedar Rapids, Iowa, June
22-25.
6 T.P. Lyons