Des Moines Register
02/05/06
Ethanol plant counts on coal for power
The change will cost less than natural gas, but some complain
that coal isn't renewable.
By JERRY PERKINS
REGISTER FARM EDITOR
Goldfield, Ia. — Central Iowa Renewable Energy's new ethanol dry mill plant is
the first one using coal as its source of power.
Substituting cheap coal for more expensive natural gas will save the ethanol
plant about $1 million a month based on the current difference between the price
of coal and that of natural gas, said Brad Davis, general manager of Gold Eagle
Cooperative, which was instrumental in building the plant.
After corn, energy is the second-largest expense of running an ethanol plant.
New technology has taken much of the pollution out of burning coal, said Valerie
Reed of the U.S. Department of Energy.
But using biomass energy sources like switchgrass or corn stalks would be a
much better way to produce ethanol, said Robert Brown, director of Iowa State
University's office of biorenewables programs. Using coal could alienate
environmentalists who now support ethanol as an oxygen-enhancing fuel that
helps fight global warming, he said.
"If a significant amount of energy used to make ethanol is not renewable, then
ethanol is not a truly renewable fuel," Brown said. "When we use coal, we're
moving in the wrong direction."
Ethanol plants are popping up like mushrooms in Iowa, the No. 1 state in ethanol
production.
There are 21 plants in Iowa making ethanol, and another five are scheduled to
come online this year, said Lucy Norton of the Iowa Renewable Fuels
Association.
Demand for the gasoline additive and substitute is growing rapidly. The reasons:
The national energy policy aims to replace foreign petroleum with domestically
produced fuel. Air-quality concerns can be eased by ethanol, and tax breaks
make the corn-based fuel cost-competitive.
President Bush said in the State of the Union speech that the United States
needs to find a way to replace foreign petroleum with domestically produced
ethanol.
With promise like that, there is a danger that ethanol plants will be overbuilt and
excessive supplies will drag the industry down.
Using coal to cut costs, said Davis, might mean the difference between success
and failure for the Goldfield ethanol plant.
"We want to have the lowest cost of production so we can be the last man
standing," Davis said.
Reed, who works in the biomass program at the U.S. Energy Department in
Washington, D.C., said the technology to use biomass crops for energy will be
ready in about a decade.
"If Goldfield and the other ethanol plants using clean coal technology prove it can
work, then we can integrate coal and biomass," Reed said. "Our goal is to
produce ethanol so it is cost-effective with petroleum."
Reid Detchon of the Energy Future Coalition — which seeks to bridge differences
between business, labor and environmental groups on energy policy — said coal
can serve as a temporary energy source until other, more renewable and
environmentally benign sources are developed.
Biomass crops, methane from livestock manure or wood chips all are being
explored by the ethanol industry as possible power sources, he said.
"The use of coal could just be a temporary step," Detchon said.
Reed said advances in "clean coal" technology have significantly cut air
emissions.
"With the current cost of natural gas, coal now stacks up very well," she said.
"The challenge of adopting the new clean coal technology was cost. With higher
natural gas prices, clean coal technology is now competitive."
Brown said the same thing could happen when technological breakthroughs
make burning biomass crops more competitive economically.
The Goldfield plant has met all air emission requirements in its first month of
operation, said David Vander Griend of ICM Inc., the Wichita, Kan., engineering
company that designed the coal-fired system.
"You're burning 12 semi-truckloads of coal a day and you're getting four semi-
truck loads of emissions a year," Vander Griend said.
Davis said after a month of operation, the coal-burning system is still being
massaged, but air monitoring equipment at the plant shows that emissions are
less than projected.
"I'm amazed," he said. "Nothing comes out of the stacks except a vapor cloud."
Vander Griend said another advantage of a coal-fired ethanol plant is that it uses
domestically produced coal instead of imported natural gas. That helps cut the
U.S. dependence on foreign energy, he said, just like ethanol made in the United
States replaces petroleum from abroad.
The coal that powers the Goldfield ethanol plant comes from the Powder River
Basin in Wyoming and is purchased from Alliant Energy. Davis declined to say
what Central Iowa Renewable Energy is paying for its coal, "but I can easily say
that coal is four to six times cheaper than natural gas."
Central Iowa Renewable Energy uses 300 tons of coal a day to power the
ethanol plant.
Installing coal-burning equipment in an ethanol plant costs $18 million to $20
million more than a natural gas system, said Vander Griend. The Goldfield
ethanol project, including construction and land acquisition, cost $91 million.
Although it costs more to build a plant that burns coal, it will cost 24 cents less a
gallon to make ethanol with coal than natural gas.
At a 50-million-gallon-a-year plant like the one in Goldfield, that amounts to
savings of $12 million a year.
"Goldfield was the first ethanol plant to request the use of coal-fired technology,
and we designed it for them to meet emission requirements," said Vander
Griend. "The technology was adapted from a system that burned wood waste."
By controlling the temperature of the burn, Vander Griend said, the coal-fired
system maintains the proper temperature to comply with air emission
requirements.
The Central Iowa Renewable Energy plant here is the first of three dry mill
ethanol plants that will use coal. Coming online this spring will be the Lincolnway
ethanol plant in Nevada, Ia. Another plant is under construction in Heron Lake,
Minn.
All three plants have been designed and constructed by Fagen Inc., which has
built 42 ethanol plants. The Granite Falls, Minn.-based company has about 12
more ethanol plants coming online.
AGP, a soybean processor owned by 216 local cooperatives and six regional coops, announced last year that it is building a new coal-fired energy center in
Hastings, Neb.
The coal will produce steam for an ethanol plant, a soybean processing plant and
a newly expanded vegetable oil refinery there, said Mike Maranell , senior vice
president for corporate and member relations. "In order for us to be competitive,
our cost of production is something we need to be managing to serve our
customers in domestic and international markets," Maranell said.
Vander Griend said he wants the Goldfield, Nevada and Heron Lake ethanol
plants up and running before ICM and Fagen build more coal plants.
"We guaranteed that the unit will meet emission regulations and we had to make
it work," Vander Griend said. "We took a significant risk and we'll be breathing a
big sigh of relief once this happens."