Mark Yancey

1
Siting Your Ethanol Plant Important Selection
Criteria
20th International Fuel Ethanol Workshop and
Trade Show Ethanol 101 Seminar

• Mark Yancey
• BBI International
• 602 Park Point Drive
• Suite 250
• Golden, CO 80401
• myancey_at_bbibiofuels.com

2
Project Development Path

• Organize board/business
• Secure seed money
• Feasibility Study
• Business Plan
• Prospectus
• Raise Equity
• Secure Debt Financing
• Construction and Startup

3
Key Elements of an Ethanol Feasibility Study

• Site Selection
• Feedstock Analysis
• Ethanol, DDGS CO2 Markets
• Financial Analysis
• Construction costs
• Owners costs
• Operating costs
• Sensitivity studies

4
Ethanol Production
5
Siting Macro View

• Locate your plant where low cost corn is
  available (Corn Belt) and ship ethanol to the
  East and West Coast markets
• or
• Locate your plant near ethanol, DDGS and CO2
  markets and rail in corn

6
Ethanol Production Markets
7
Advantages/Disadvantages

• Corn Belt Site
• Corn available locally/lower cost
• Ship ethanol and DDGS to local, regional and
  national markets
• Probably wont sell CO2
• Outside Corn Belt Site
• Higher cost corn/multiple sources
• Lower ethanol shipping costs
• May have market for CO2
• Avoid shipping in corn and shipping out products

8
Site Selection Micro View

• Feedstock
• Rail
• Natural Gas
• Water/Wastewater
• Electricity
• Road Access
• 40 acres in an industrial or rural area
• Community support

9
Feedstock

• Local (80 mile radius) or imported feedstock?
• Availability and price (10-yr history)
• Ethanol yield
• Co-product yield
• Competition

10
Competition for Feedstock
11
Rail Service

• Rail service is essential for larger plants
• Mainline or shortline?
• Financial health of shortline railroad
• Existing switch and siding?
• Service and switching
• Consider a unit train loop track if corn is to be
  imported from Midwest

12
Natural Gas

• Buy natural gas on the open market
• Pay transmission and distribution costs energy
  costs
• Consider sites near gas transmission lines
• 35,000 BTU/anhydrous gal ethanol
• Do not finalize your site selection until gas
  supply has been negotiated

13
Water and Wastewater

• Water supply
• 10 to 15 gallons per bushel required
• Cost to reduce hardness, sulfur, iron, etc.
• Wells most common, city or river supply
• Wastewater
• Cooling tower blowdown, water treatment blowdown
• 20 of makeup water (varies with water quality)
• Discharged to surface waters, POTW, or holding
  ponds with irrigation
• Beware of restrictions regarding TDS

14
Electricity

• Ethanol plants are large electricity users with a
  high capacity factor
• Adequate infrastructure, new substation?
• Two sources for higher reliability
• 0.75 kWh/anhydrous gal ethanol
• Consider cogeneration if electric rate or
  infrastructure costs are too high
• Do not finalize your site selection until
  electricity supply has been negotiated

15
Other Site Considerations

• Road access consider the impact of truck
  traffic
• For 40 mmgy plant 25 to 40 acres
• 160 acres for 100-car unit train loop
• Is your plant supported or opposed by the local
  community?
• Ethanol plants are industrial facilities do not
  locate in residential areas

16
Gaining an Advantage

• Low feedstock cost
• Proximity to ethanol markets (lower shipping
  costs)
• Low energy costs
• Large wet distillers grain market
• Tax abatements and economic development programs
• Local CO2 market

17
Thank You!
www.bbiethanol.com