Madera Pacific Ethanol plant lands sweet neighbor

 Published on 08/22/2014 - 8:45 am

Written by John Lindt    

Pacific Ethanol has decided to locate a New York-based cellulosic sugar producer near the Madera plant as part of a new partnership.Pacific Ethanol has decided to locate a New York-based cellulosic sugar producer near the Madera plant as part of a new partnership.It’s better times for California’s ethanol producers, with investment dollars flowing into technology to make production plants more efficient and diverse in the feedstocks they accept.

“We are just about there,” said Paul Koehler, spokesman for Sacramento-based Pacific Ethanol, referring to the long-time effort to begin making ethanol from farm waste and nonfood feedstock instead of corn.

One of the benefits of cellulosic ethanol is that it reduces greenhouse gas emissions by 85 percent over reformulated gasoline. Some feel cellulosic ethanol's potential is vast, noting that the Department of Energy has identified 1.3 billion tons of harvestable cellulosic biomass in the US that could be used to meet more than one-third of domestic transportation fuel demand.

A new local collaboration could hit the sweet spot when it comes to ethanol production.

Plan in works

Last December, New York-based Sweetwater Energy and Pacific Ethanol agreed that the biofuel maker would buy industrial cellulosic sugars from Sweetwater to be produced at a new facility next to one of its ethanol plants. It was originally envisioned to be located at the Pacific Ethanol plant in Stockton.

But in the past week, Pacific Ethanol decided to launch the venture at the  Madera location, using ample land the company owns next to the facility to build a new plant that will supply the waste-based sugar for up to 3.6 million gallons of cellulosic ethanol annually.

“We are in the permitting stage for Sweetwater, who will design and build their plant over the next 24 months and be in operation by the end of 2016,” Koehler said. Industrial sugars are said to be six times as efficient as corn in making ethanol. Koehler expects the new plant will employ 20 to 30 people.

“The Sweetwater platform furthers our initiative in producing next-generation fuels such as cellulosic ethanol while providing additional flexibility in sourcing, reducing feedstock costs and enhancing plant operating margins,” said Pacific Ethanol CEO Neil Koehler.

Edeniq partnership

In a second cellulosic initiative Pacific Ethanol is working with Visalia-based Edeniq to use its patented enzyme that would convert corn stover to ethanol.

Edeniq announced just weeks ago the Environmental Protection Agency’s decision that corn kernel fiber qualifies as a cellulosic feedstock under the renewable fuel standard program regulations. This rigorous determination will allow Edeniq’s PATHWAY Platform to be used by customers to produce cellulosic ethanol inside corn ethanol plants.

Edeniq’s patented PATHWAY Platform combines its CellunatorTM technology with an enzyme cocktail to break down corn kernel fiber, releasing cellulosic sugars into the fermentation process. Corn kernels contain approximately 13 percent cellulosic fiber that remains unconverted in a typical ethanol plant.

“Cellulosic ethanol produced from corn kernel fiber is one of the fastest and most cost-effective ways to improve the efficiency and sustainability of the ethanol industry in the United States,” said Brian Thome, President and CEO of Edeniq.

More Madera investment

Pacific Ethanol’s Paul Koehler said the Madera plant is also installing corn oil manufacturing equipment by the end of this year. The process converts a by-product into a valuable feed.

Koehler also said Madera will install technology to make another feed product — Kornplex — on a small scale to start.

Koehler added Pacific Ethanol is studying possible cogeneration at its plants to make electricity. ”We are a steam hog,” joked Koehler.

All this investment is happening in Madera, a plant that had been idled for five years and was only restarted earlier this year after a major retooling.

Back to profitability

Pacific Ethanol this week released its second quarter fiscal results, with net sales of $321.1 million, compared to $233.8 million last year. A record total gallons of 132.2 million gallons was sold, compared to 101.2 million in the same quarter last year.

Gross profit for the quarter was $33.6 million, up from $7 million during the second quarter of 2013. The report says” the improved gross profit is a result of significantly improved production margins and corn oil production.

Operating income was $29.3 million, up from $3.8 million during the same three months of last year. Net income attributable to common stockholders was $15.3 million, or 68 cents per diluted share. During the same quarter of last year, Pacific Ethanol reported a net income available to common stockholders of $700,000, or 7 cents per diluted share.”

During a call to discuss the results, CEO Neil Koehler noted the company has continued to perform exceptionally well: “The plants are operating at excellent margins, our marketing business continues to grow in both gallons sold and overall margin contribution, and we are reinvesting capital in our core production business to further reinforce our market position,” he said.

http://www.thebusine