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Talking Point

Corn oil extraction can help sustain biodiesel industry growth
By Mike Bryan, CEO BBI International | February 01, 2006
U.S. ethanol producers have come to the realization that, for some 25 years now, they've been virtually giving away corn oil contained in distillers grains for pennies on the dollar.

Finally, it looks like that's going to change.

Extracting all or a portion of the corn oil seems to not only have a positive effect on the ethanol production process, but also on the resulting distillers grains. It also reduces coproduct drying costs, a big plus when natural gas prices are high. Most importantly, it adds a new revenue stream to the ethanol dry mill set up.

Not long ago, BBI International conducted a study for Natural Resources Canada to evaluate corn oil extraction technologies, potential synergies in integrating those technologies with biodiesel production, and the impact it would have on the resulting distillers grains coproducts. BBI worked in cooperation with Canada's leading ethanol producer, Commercial Alcohols Inc., and soon-to-be Canadian biodiesel producer Biox Corp., along with the U.S. Department of Agriculture. What we found, while not totally surprising, was impressive.

There are a number of current and evolving technologies for corn oil extraction. The two basic options are front-end removal, which removes the oil before processing the corn and the back-end process which removes the corn oil after fermentation and distillation. The front-end extraction process produces a cleaner corn oil and captures 50 percent more product. However, as one might expect, the cost is at least triple that of back-end extraction processes. So for the ethanol producer, it becomes a matter of analyzing the intended end use and the capital cost required for implementation.

A general assumption is that the front-end process is best suited for new construction and the back-end process for existing retrofits. However, there are some new ethanol plants that are opting to install back-end extraction technologies, hoping to penetrate the biodiesel market with a very competitively priced product.

In fact, it seems like almost overnight that ethanol producers started thinking, "I'm getting 5 cents per bushel for my corn oil (in distillers grains) and you're telling me I can double that by adding corn oil extraction technology to my plant." Plus, they're not just increasing their revenue, their producing a whole new feedstock that's suitable for biodiesel production. Collocating plants becomes an instant option.

Already, we're seeing corn oil extraction technologies hit the ethanol industry. In 2005, we witnessed Ethanol Oil Recovery Systems (EORS) team up with ethanol producer VeraSun Energy, which is working to get several participant plants onboard with using EORS' corn oil extraction skids. In late 2005, VeraSun said its plan was to get 14 ethanol plants (40 MMgy or larger) to agree to sell their corn oil extract to VeraSun. In turn, VeraSun said it would eventually establish a 50 MMgy biodiesel plant under the name VeraSun Biodiesel.

Meanwhile, EORS' founders have launched another company, Mean Green BioFuels Corp., which will install its corn oil extraction systems into client ethanol facilities on a turnkey basis for no up-front cost. Mean Green says it will customize the design of its system to meet the desired corn oil recovery objectives of participating facilities, and then purchase the extracted oil from the plants at a premium. In turn, Mean Green intends to build five 30 MMgy biodiesel plants over the next two years. The feedstocks for these facilities will include corn oil, soybean oil and animal fats.

What's it all mean?

To an ethanol producer, this means extracting more profit out of every bushel of corn processed. To the distillers grains buyer, it means having the capability of purchasing a product that is better suited for their specific needs. For a biodiesel industry that may be somewhat strapped for raw materials in the years ahead, corn oil may provide an additional, competitively priced feedstock that will help sustain the growing industry's build-out.

Mike Bryan is CEO of BBI International. Reach him at mbryan@bbibiofuels.com. Information about VeraSun Biodiesel, EORS and Mean Green BioFuels presented in this article was taken from existing BBI International Media reports.
 

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