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DOE Ethanol Workshop Series

New York Ethanol Workshop
Ethanol in New York: Today and Tomorrow

September 14, 2000
9:00am to 4:20 pm

Italian-American Community Center
257 Washington Avenue Extension, Suite 2
Albany, New York

SUMMARY

New York Ethanol Roundtable Conference
A DOE Ethanol Workshop

Ethanol in New York: Today and Tomorrow
September 14, 2000



Attendance

The New York workshop had the largest attendance of 110 people. Approximately 45% represented private industry, 34% government, 14% academia, 7% other such as non-profit or retired.

The Workshop

The theme for the workshop was “Ethanol in New York: Today and Tomorrow.” The purpose of the workshop was to discuss the opportunities for ethanol production of ethanol from grain and cellulose feedstocks, potential ethanol markets, environmental impact of ethanol use, and policies for development.

Rick Zimmerman, Deputy Commissioner of the NYS Agriculture and Markets, and Jeff Peterson, Program Director for the New York State Energy Research and Development Agency (NYSERDA) welcomed the workshop delegates.

Mr. Zimmerman viewed ethanol as an integral part of growing NYS agricultural markets. The first goal in increasing total production is to get current production to equal total need. Good agricultural policy is necessary to meet this objective. He believes the “Freedom to Farm” movement can benefit by recent legislative initiatives within the “Washington 2000 Farm Bill.” This work supplements the research and development based “Grow New York” grant program.

Mr. Peterson views the connection between NYSERDA and the organization’s interest in “green chemical technology’ as the connection to ethanol. One program directly related to ethanol is the BioFine facility that creates useful chemicals from waste. The Biofine project, which is also developing biodiesel production, won an EPA Presidential award in 1999. NYSERDA is also working with Environmental Science and Technology at Syracuse to develop dedicated feedstock for the BioFine facility.

The keynote address was given by John Ferrell, Director of DOE’s Office of Fuels Development, who expressed that New York State is a “fertile ground for an ethanol industry” because of current government support, resources and the presence of pioneering firms, such as Masada Resources. The challenge is to create opportunities and eliminate barriers for ethanol market and technology. However, the timing is good because current and upcoming agricultural, environmental and tax policy has created a “slow moving but massive front” supporting ethanol technology and markets.

Ethanol will become cost competitive over time especially with improvements in enzyme manufacturing. Enzymes can improve efficiency of ethanol production by ten times. Presently, a corn-ethanol plant can be built for $1.50 per gallon capacity. Mr. Ferrell’s final remarks provided a national overview. He spoke on how the California Air Resources Board (CARB) influences national policy and how state and local clean fuel initiatives can learn much from CARB. CARB’s mission and expertise requires the environmental benefits must be clearly understood, measured, and quantified and then compared to other technologies.

John McClelland, Director Energy and Analysis for the National Corn Growers Association, spoke on the history of agricultural policy followed by an update on a bill S.2967, which includes a ban on MTBE and a renewable fuels requirement. Bill S.2967 is a landmark policy for the future with its stakeholder approach that had environmental groups such as the NRDC present, combined with the success of state programs such as Minnesota for models.

James Czub, New York Corn Growers Association, shared that in 1997 and 1998 there was a 6 million bushel corn surplus grown in New York State. Presently New York State imports from other states all vehicle fuel needs. Fifteen million gallons of ethanol could be produced from the current corn surplus in New York. The creation of a market for ethanol could put the 5.4 million acres of dormant farmlands back into revenue generating production.

Phil Lampert, National Ethanol Vehicle Coalition (NEVC), said ethanol could provide economic development for New York. Ethanol development can add value by removing low value starch from supply by conversion to ethanol. A market already exists because of the more than ten million ethanol ready vehicles on the road.

Don Draizen, President of Rad Energy Corp., said he would like to see an increase in ethanol suppliers through local ethanol production. Rad Energy, one of the state’s largest blenders, has been distributing ethanol for 10 years. Mr. Draizen stated that the business view for developing ethanol is purely economic. And, government policy at this time is the most important ethanol development issue. Currently, ethanol is considered a boutique fuel. He shared that upper level management at TOSCO, the nation’s largest independent fuel producer, supports the development of ethanol and other ethanol coalitions that are making headway in developing markets for ethanol.

Marguerite Downey, United States Postal Service, who is in charge of the alternate fuel vehicle implementation plans for the US Postal Service said she had noticed the high level of interest for alternate fueled vehicles, especially ethanol, in New York State. One of the issues, however, is refueling services.

Admiral Richard H. Truly, Director of the NREL, presented an insightful overview on global energy current and forecasted demand and the need for renewable energy.

Gary Whitten Ph.D., ICF Consulting, said that ethanol possesses positive and negative attributes. These attributes require tradeoffs in decision-making and changes in current policy. This is especially true between the need for oxygen in fuel, which is a positive for ethanol, and performance characteristics such as previously mentioned vapor pressure, an ethanol negative. The switch from MTBE to ethanol, creates numerous difficulties amongst industry and policy forming stakeholders.

The focus of Susan Power’s Ph.D., Clarkson University, presentation was on water quality issues and how ethanol behaves differently in ground water than MTBE. She provided a comparison of ethanol and MTBE in underground storage tank (UST) problems, mentioning that MTBE leaking from USTs moves through groundwater faster than the water itself.

Rick Handley, Coalition of Northeast Governors and Program Manager for the DOE Northeast Regional Biomass Energy Program, discussed the current success on the increased production of ethanol in conjunction with economic development in the Midwest and especially Minnesota. Their ethanol policies created an increase in the value added for corn in the state. Other examples of success include Nebraska, which now receives 3% of tax revenues from ethanol. Of this 3%, 20 % come from the conversion of corn to ethanol while 70% is from the conversion of sorghum to ethanol. Mr. Handley also stated that these ethanol success stories were dependent upon public private cooperation; and that the catalyst for success was the result of a champion that took responsibility for the project. Success of early products created markets through the use of production incentives.

Jacki Moody, New York Corn Growers Association, and George Proakis, NYSTEC/AFTC consultant, presented, in association with NYSERDA, a report entitled, “Ethanol Production Economic Analysis”. The report was just completed and applied an economic modeling software package using a corn-ethanol production scenario. The agricultural inputs included the assumption that 11.4 million bushels of corn were available to produce ethanol. This amount is approximately that amount of surplus corn grown in New York State over the past few years The long awaited information now available - combined with the recent heightened activity and interest in energy – has increased the opportunity for an ethanol industry in New York State.


 


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