More Minnesota ethanol plants seeking profits beyond ethanol

  • Article by: DAVID SHAFFER , Star Tribune
  • Updated: October 14, 2013 - 1:20 PM

Three producers see advantages in making another kind of alcohol that can be sold as a higher-value chemical as well as a biofuel.

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Central MN Ethanol Co-op is located on Hwy. 371 in Little Falls Minnesota on Highway 30 miles north of St. Cloud. Construction of the plant was completed and production began in March 1999. CMEC purchases approximately 7.5 million bushels of corn per year from a 100 mile radius and produces approximately 20.8 million gallons of ethanol per year. In September, Green Biologics, Inc., the U.S. unit of a UK-based biotech company, entered into an exclusive letter of intent to acquire the plant. Green Biologics plans to retrofit it to produce n-butanol and acetone, which can be sold as chemicals to make paints, adhesives and a wide range of other products. The deal awaits a final agreement.

 

Minnesota, a pioneer in the ethanol industry with 21 production plants, is leading a shift away from the fuel.

Two more ethanol plants, in Lamberton and Little Falls, are seriously considering retrofits to produce an alcohol called biobutanol. The ethanol plant in Luverne, Minn., already has made the switch.

It’s happening as many ethanol makers struggled in the past year with high, drought-related corn prices that have left 20 U.S. plants still closed. The interest in potentially higher-value alternative alcohols seems to have converged on Minnesota.

“You are definitely in the middle of a hotbed of activity — there is no other way to say it,” said Steven Slome, a New York-based consultant for the strategic advisory service Nexant.

Slome is working on a report for Nexant clients, “Biobutanol and Downstream Markets: Will You Be Buying Bio?”

The hoped-for answer is ‘‘yes’’ for companies like Green Biologics, the U.S. unit of a British biotech firm. In September, it signed a letter of intent to acquire the Little Falls ethanol plant. The company intends to invest “tens of millions” to switch production to a chemical called normal butanol that sells for $6.50 per gallon vs. $2 per gallon for ethanol.

In Luverne, Gevo Inc. is ramping up production of a chemical cousin called isobutanol. Gevo is trying to build a market for the product as jet and marine fuel and as a chemical building block for such products as renewable plastic bottles for the Coca-Cola Co.

Butamax Advanced Biofuels, the Wilmington, Del.-based joint venture of DuPont and BP, announced last week the first stage of retrofitting the Highwater Ethanol plant in Lamberton to produce isobutanol.

Like ethanol, biobutanol starts with corn. But, unlike ethanol, which ends up at a gasoline pump, butanol also is used to make products ranging from paint to plastic, from food additives to cosmetics.

Most butanol is made from petroleum, but Nexant’s Slome said a key ingredient in that process, propy­lene, is in short supply. That’s driving interest in biobutanol, he said, along with environmental issues, renewable fuel standards and a need for renewable materials in green buildings.

“This all is helping to push it forward,” Slome said.

One potentially game-changing shift is envisioned in 2015 at the Little Falls plant. Instead of fermenting corn with yeast — the way beer, vodka and ethanol are made — Green Biologics would use a proprietary bacteria. The result is normal butanol, also called n-butanol, and acetone.

The technology is an advancement on one developed early in the 20th century by chemist Chaim Weizmann, who later was Israel’s first president. That process lost favor in the 1950s when petrochemical makers found a cheap way to produce butanol.

“We have taken known and proven [bacteria] strains from the 1950s and made them function even better,” said Joel Stone, president of the U.S. unit of Green Biologics since it merged last year with his Ohio-based biotech company.

Stone said a pilot biobutanol plant in Emmetsburg, Iowa, is honing the process. Little Falls would be the first commercial deployment of Green Biologics’ technology outside of China, he said.

Green Biologics aims mainly to sell biobutanol for paint and adhesives. The world market could reach $9.4 billion in five years, says Dallas-based consultant MarketsandMarkets.

Two other biotech companies are taking a different biobutanol road in Minnesota.

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