[Sustainable-biodiesel] Land of milk and biofuel

[Rachel Burton]

ED TAYLOR, TRIBUNE

http://www.eastvalleytribune.com/story/89616

Milk and biofuel might seem an odd combination, but a Phoenix-based  
company is planning to produce both at a proposed dairy/biorefinery  
in western Arizona.

When fully built, the $260 million ag-industrial complex planned by  
the XL Dairy Group will produce 100 million gallons of ethanol, 25  
million to 30 million gallons of biodiesel fuel and 21 million  
gallons of milk a year.

The concept is to use waste produced by the dairy cows to make energy  
that would be used to turn corn into ethanol and biodiesel, said  
Dennis Corderman, chief executive and chairman of XL Dairy Group.  
Byproducts of the ethanol and biodiesel production will be cycled  
back to produce internal energy for the biorefinery and to provide  
feed for the dairy cows, he said.

“The biggest difference between us and other ethanol plants is we  
will use waste streams from the dairy to produce our own energy,” he  
said. “It will provide the electrical and heat and steam energy for  
the entire facility.”

Because the plant will supply its own power, the operation will have  
an energy efficiency ratio of 10-to-1, he said. That means for every  
one British Thermal Unit of energy put into the process — including  
indirect energy consumption such as fuel needed to grow corn — the  
equivalent of 10 units of energy in the form of ethanol and biodiesel  
will be produced.

Conventional ethanol plants have an energy efficiency ratio of about  
1.2-to-1, he said.

One similar cow-power facility exists in the United States — the E3  
BioFuels Genesis plant in Mead, Neb., which has an ethanol plant  
attached to a dairy/feedlot. It became fully operational a few weeks  
ago.

XL Dairy Group has completed construction of the first phase of the  
dairy on a 307-acre site near Interstate 10 and Vicksburg Road, about  
100 miles west of Phoenix. The firm will move in the first of 2,500  
dairy cows in about three months to begin milk production, Corderman  
said. Also within three months, the company plans to begin  
construction on the second phase of the dairy, which will eventually  
house about 7,500 milk cows.

It is scheduled to begin operations at the end of this year.

Then construction will begin on the biorefinery and an internal  
energy plant, or “energy island,” with completion of both expected by  
the end of 2008, Corderman said.

A second phase that would more than double the output of the  
biorefinery could be running in about five years.

APS Energy Services, an unregulated division of Phoenix-based  
Pinnacle West Capital Corp., will operate the internal energy island.

The result will be an efficient process without the need for outside  
electricity or natural gas to produce the fuels, said Project  
Coordinator Michael McCloud.

“We will be tied to the utility for redundancy, and we can use  
electricity from the grid for the startup,” he said. “But at full  
operation we will not need any fossil-based fuels — natural gas or  
coal-fired power.”

Corderman estimates the efficiencies will allow the Vicksburg  
Biorefinery to produce ethanol about 30 cents a gallon cheaper than  
conventional ethanol plants.

ALGAE POWER
But Corderman believes that real efficiencies will start after the  
second phase goes into action. Instead of corn shipped in by rail  
from the Midwest, it will use algae as the feedstock to produce both  
ethanol and biodiesel. XL plans to grow algae on 2,400 acres of  
adjacent state land, using manure water, carbon dioxide produced as a  
byproduct of the ethanol process and sunlight.

The company will propagate algae in a patent-pending system of  
horizontally mounted clear tubes, Corderman said.

“We feel that we have developed and are patenting the first  
commercial methodology to produce algae on a large scale,” he said.  
“There is no question about the biology and efficiency of algae to  
produce fuel. The problem has been doing it cost-effectively, and we  
think we have resolved that.”

But he said it will take 12 to 18 months to prove the efficiency of  
the algae system and another three years to have a facility producing  
fuel.

The reason algae are a potentially efficient fuel source is that huge  
amounts can be grown in a relatively small area. Algae grown on 2,400  
acres could produce as much fuel as 115,000 acres of corn, Corderman  
said.

Another benefit of algae farming is that it consumes carbon dioxide,  
a greenhouse gas, produced in the ethanol-making process. Carbon  
dioxide also will be captured for other applications such as beverage  
carbonation, cooling and the production of dry ice.

The ethanol will be used primarily as an additive to gasoline to make  
it burn cleaner, not as a primary fuel known as E85 — a blend of 85  
percent ethanol and 15 percent gasoline. The plant’s service area —  
Arizona, Las Vegas and Southern California — demands so much ethanol  
that it will absorb all of the plant’s production just as an  
additive, Corderman said.

“This region has a huge ethanol deficit,” he said.

PLENTY OF POWER
Leonard Byrd, project manager for APS Energy Services, believes the  
project is economically and technically feasible. He said it uses  
existing technologies, although in a different combination than has  
been tried anywhere else.

“Right now all the preliminary numbers say we should be able to make  
all of the power and all of the steam that will be needed,” he said.  
“And we’re hoping to have surplus energy that could be put back in  
the market.”

APS Energy Services has had preliminary discussions with other  
dairies and feedlots in Arizona to produce renewable energy from  
manure, he said. But some of them may wait to see how the XL Dairy  
project turns out first, he said.

“To some extent, people are wanting to see the actual product work.”

LOCAL OPPOSITION
Opposition to the XL project surfaced last fall when the company  
applied for a special use permit from La Paz County. Neighbors in  
Vicksburg and Salome complained about potential traffic, smells,  
safety, environmental and other problems they believed the facility  
would generate. As a result of those concerns, La Paz County  
supervisors placed 23 stipulations on the project as conditions for  
receiving the permit.

Among the requirements are that the company coordinate with local  
fire districts and police to ensure the safety of the plant and  
surrounding area and draw up hazardous material and emergency  
response plans.

The county also required the company to comply with air-quality laws,  
implement a county-approved landscaping plan, pave access roads and  
parking facilities and submit periodic water-use reports.

La Paz County Supervisor Mary Scott, who represents the Vicksburg  
area, said she supports the project because of the economic impact it  
will have on the largely rural county.

The dairy/biorefinery is expected to create about 400 construction  
jobs and 175 permanent jobs once it is operating.

“We’re a smaller county, so that’s a big shot in the arm for our tax  
rolls,” she said.

Steve Owens, director of the Arizona Department of Environmental  
Quality, said the biorefinery will require an air-quality permit and  
possibly a water-quality permit. Although the factory plans to  
recycle many of its materials, it still will produce some emissions,  
he said.

He declined to discuss details because final plans have not yet been  
submitted to the department. But on the basis of verbal discussions,  
Owens said it appears the operation will be “pretty clean.”

CLOSED LOOP
Some of the technology to be used at Vicksburg is already operating  
at the E3 BioFuels plant in Nebraska. It employs an anaerobic  
digester to transform cow manure to biogas, which is used as a  
substitute for natural gas in converting corn to ethanol at an  
attached biorefinery. It also involves a closed loop system, using  
byproducts from the ethanol process as feed for the animals.

However, the Nebraska project is not independent of the local power  
grid.

“They could become self-sufficient, but electricity is so cheap in  
the Midwest that it doesn’t pay to set up an internal generating  
plant,” said Peter Kelley, a publicist for the fuel factory.

Still, the operation is more efficient than conventional ethanol  
production, he said. The biorefinery produces 46 BTUs of ethanol  
energy for every one BTU of outside energy put into the process, he  
said.

Eventually, the developers hope to use cellulosic material from the  
corn plants to increase ethanol production by about 20 percent,  
Kelley said.

The major obstacles to getting the plant operating have been weather  
related, including tornadoes and heavy snow during the past winter,  
he said.

“It is working,” he said. “It’s all proven technology. The novel  
thing was linking it in a closed loop.”