Will nonfood beets be an ethanol feedstock?
FARGO, N.D. -- "Energy beets." That's what a small group of agribusiness leaders want you to call them. "Not sugar beets," emphasizes Maynard Helgaas of West Fargo, N.D. Helgaas and a small band of like-thinkers want the region to envision that b...
FARGO, N.D. -- "Energy beets." That's what a small group of agribusiness leaders want you to call them.
"Not sugar beets," emphasizes Maynard Helgaas of West Fargo, N.D.
Helgaas and a small band of like-thinkers want the region to envision that by 2012, a series of five ethanol-producing factories, dotting North Dakota, and making ethanol from a new source -- beets -- not corn, and not sugar beets that would otherwise be used as food.
Unlike the 100 million-gallon corn ethanol plants that are recent standard size, these ethanol plants would produce 10 million to 20 million gallons of ethanol per year, each associated with 28,000 acres of beets.
The plants would be built in "modules," so they could be replicated, but would take in beets from a 30-mile radius. Each of the plants would cost about $43 million, including about $10 million in operating funds.
While the economics are preliminary, promoters think its possible to produce from $500 to an $800 an acre in profits from these kinds of plants -- at least $335 from the production side, and $114 from the processing, assuming they own part of it.
"All that depends on the price of ethanol," Helgaas says. "You can see that this would be big -- and exciting," Helgaas says.
Start of an idea
It was the Energy Independence and Security Act of 2007 that started Helgaas thinking about all of this. That was the one that set the Renewable Fuels Standard at 35 billions of gallons of ethanol -- 15 billion from a conventional feedstock like corn and 20 billion from advanced biofuels, including sugar beets and cane.
Helgaas further was inspired by author Robert Zubrin, who wrote a book called Energy Victory.
Digging into the topic, Helgaas learned corn ethanol had a 22 percent better carbon footprint than petroleum and that "advanced biofuels," including sugar beets and sugar cane, were even better -- 55 percent better.
About a year ago, Helgaas huddled with Rudy Radke, a North Dakota State University Extension Service specialist in high-value crops and ag diversification in Fargo.
The two are longtime friends. They worked together on irrigation-related projects in the past. They also conferred with Rod Holth of Grand Forks, N.D., who had been involved in these high-value irrigated crops. Holth had been a partner in running KIP Farms of Karlsruhe, N.D., and was among the early leaders in creating a processing potato industry in central North Dakota. Soon, they brought in Lloyd Anderson of M.Power L.L.C., a wind development company. Anderson had worked with strategic planning as an engineering consultant for the potato project, back when he was with what then was called Eide Helmeke & Co. (now Eide Bailly).
In July 2008, the four created a consulting company called Green Vision Group, a Subchapter S corporation. The idea was to use the entity to develop an ethanol factory using nonfood sugar beets and molasses as a feedstock.
Helgaas is the president and Holth is the secretary-treasurer. Radke and Anderson are resource people.
"We say the purpose of the company is to be architects for rural development," Helgaas says. "We're not just into energy, but right now, that's taking all of our time. There are other areas out there that need work, but this one is paramount."
Green Vision quickly discovered Heartland Renewable Energy of Muscatine, Iowa.
HRE is a similar group of university, producers and managers. For about three years, the company has been studying ethanol-from-beets.
The Iowa company had an arrangement to with Syngenta to do yield plots in the Muscatine area, to check for yield and quality information.
"They're farther along and have yield plots that show 40 tons per acre," Helgaas says, noting that's about twice the tonnage of conventional food-type sugar beets grown in the Red River Valley.
HRE demonstrated their process in a tabletop processing plant, for fermentation. The residual "stillage" went through a lab-scale burn test and indicates it could produce 75 percent of the heat that such a processing plant.
At the same time, BBI of Denver conducted an economic feasibility. Helgaas says it found the process probably would break even when the "rack price" for ethanol is $1.57 per gallon,, but if it's sold regionally, the break-even probably would be as low as $1.40 per gallon because of freight savings. The BBI study in Iowa the company forecast the future average of $1.81 per gallon rack price for ethanol, but the industry considers $2.19 per gallon as a future.
In 2008, HRE went through a stock sale and raised $1 million, but fell short of its goal.
Ethanol from beets is simpler than from corn, Helgaas says.
Beets are ground, not sliced. The process doesn't have any problem sorting out rocks.
"Larger rocks will fall into the water flume and the smaller rocks are ground up in the process," Helgaas says.
By April 2009, the Green Vision and HRE created a "working partnership," meaning they'd coordinate their projects.
In March 2009, the North Dakota Agricultural Products and Utilization Commission awarded Green Vision a $54,140 grant, to localized "addendum" to the BBI study, and to fund agricultural demonstration plots through NDSU, in Carrington and Oakes.
Now, the group is raising funds with NDSU to provide a match for the North Dakota Renewable Fuel Council, to do a commercial-scale burn test, done by the EERC, managed by Stanley Consultants in Muscatine. That will cost $85,000.
"Besides the burn test, we have to do two more years of plot work and also expanding the plot research work to five different locations in North Dakota," he says.
Helgaas expects to have enough research done by 2012, to be able to start building plants.
Other research will be involved with stabilizing sugar juice to increase its shelf life for storage.
"That would also be a benefit to the food-type sugar industry," Helgaas says.
All of this could be a huge new beet industry in the region, he thinks.
In Germany, some 5,000 ethanol plants are up and running, compared with only 50 only three years ago. The Germans take methane from the plants and use that for making electricity.
"In the U.S., we probably couldn't do that because the price of natural gas is so competitive," Helgaas says.
In India, Syngenta has built a research-scale plant for processing "tropical beets" for energy. Some work on this has been done in California.
"They're high in sugar and they're drought-resistant. They're high in sugar, and very high-yielding," Helgaas says. "That's what made us think about nonirrigated beets here. Beets have that long taproot, you know."
Blayne Schatz, director of the NDSU Carrington Research and Extension Center, has been growing beets in a rotation and finds them useful in breaking up the hard pans in soils in the central part of the state and in bringing up and using nitrogen that even corn can't bring up.
NDSU researchers are formalizing a plan to do agronomic tests at five locations throughout the state, demonstrating the energy beet production. Helgaas says this industry -- as it was in the past for potato production -- it important to establish baseline information for the Risk Management Agency, anticipating a need for crop insurance.
At the Oakes experiment station, researchers have harvested an average of 38.4 tons per acre for the past three years, based on information on sugar beet varieties. Similarly, Helgaas says the early indications are that energy beets would require a four-year rotation.
The traditional beet industry is interested, but it isn't clear how involved they'll be.
In October 2008, the Green Vision group met with Syngenta officials. In December 2008, they also met with the boards of Minn-Dak Farmers Cooperative and American Crystal Sugar. Neither co-op has expressed interest in any direct involvement.
Traditional sugar beet cooperatives sometimes have co-products and molasses that could be used in the energy process, Helgaas says. Some years, there is an overrun in sugar beet production, where the co-ops are exceeding their sugar marketing quotas.
"In that case, it might be converted to an energy product, instead of plowing the beets under," Helgaas says.
Pluses for the "energy beet industry" would be that it "wouldn't be entirely a green-field operation," Helgaas says. "Existing sugar beet production practices would likely be similar to energy beets," he says. "You'd have similar machinery and producers who know how to grow beets could produce beets for another market -- the energy market."
On the negative side, energy beets could be used to produce pulp and yeast that could conceivably compete with existing production, although some of the energy beet pulp might be burned for energy within the process.
"Stillage would be a byproduct, but that wouldn't compete because we'd be burning it, running the plant with it," Helgaas says.
When the stillage is burned, an end product is ash, which could be sold as "potash" fertilizer. There also is a high-value brewers yeast byproduct.
Syngenta and Betaseed could benefit for a new seed market.
Helgaas says there is a big difference between breeding conventional sugar beets for crystalline human consumption and those for energy purposes only, Helgaas says.
"For food-type beets, limited in breeding for the human consumption beets because they want nice, white crystals," he says. "That's no problem for energy beets."
Helgaas and friends started looking at the potential of these "nonsugar" beets, primarily under irrigation. That's changing.
"We're beginning to believe that, with current practices of minimum tillage, conservation tillage and Roundup Ready crops, the out-state will be able to produce nearly as much as they can in the (Red River) Valley -- about 20 to 22 tons per acre. Irrigation would just pump up the yield," Helgaas says. "With the irrigation, we can work in a more concentrated area, with smaller ethanol plants, so we don't drive up the emissions and transportation costs."
The theory is if an energy beet plant were built, it likely could incorporate other biomass material that could be brought in at a reasonable cost.
"If you could utilize some of that -- 20 (percent) to 30 percent of something you could bring in and ferment with a high ethanol-producing feedstock like energy beats, it might be economical."