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Products
Company Products
Homeland Energy Solutions, LLC produces two products from corn—Ethanol and DDGS. Ethanol is sold nationwide as a high-octane fuel that delivers improved vehicle performance while reducing emissions and improving air quality. DDGS or distillers grains with soluble are shipped throughout the continental United States. In addition, a portion of the distillers’ grains are shipped to Central and South America, Europe and Asia. Distillers’ grains with soluble are a medium protein, high-energy animal feed supplement primarily marketed to dairy and beef industries. Recently, the industry has seen a significant increase in consumption of DDG’S in the swine and poultry industry. Ethanol – Product Description
Ethanol, which is made from grain or other renewable natural bio-mass resources, when mixed with gasoline as an additive, can be used to power ordinary gasoline burning engines without any engine modifications. Although the percentage ratio of gasoline to ethanol may vary, the commonly used ratio is 90% gasoline to 10% fuel-grade ethanol. Ethanol became a popular additive to boost the octane level of gasoline after the phase-out of lead additives began in the 1970’s. The octane rating of gasoline with ethanol added is higher than the octane rating of gasoline without ethanol. While much of the ethanol produced is still used as an octane enhancer, its primary function is changing to use as a fuel oxygenate. Due to the higher levels of oxygen present in ethanol, ethanol mixed with gasoline in the 90-10 ratio qualifies the mixture as an oxygenated fuel. Oxygenated fuel promotes more complete combustion of the fuel and has been determined to significantly reduce pollutants, including carbon monoxide and hydrocarbon particle emissions.
The so-called Arab Oil crisis of the 1970’s provided the impetus for legislative policies designed to promote the use of ethanol blended gasoline to reduce the country’s dependence on imported oil. In 1979, federal legislation was initiated that established a federal excise tax exemption and provided investment tax credits, loans and loan guarantees to promote the construction of ethanol plants for the production of fuel grade ethanol. Thereafter, the use of ethanol in gasoline increased dramatically. Domestic production of ethanol has gone from around 375 million gallons in 1983 to around 4.2 billion gallons in 2005.
Recently, the demand for ethanol has increased somewhat, particularly in the upper Midwest, as a result of at least one of two major programs established by the Clean Air Act Amendments of 1990 (“CAAA”). The first program, the Federal Oxygen Program, is a recurring wintertime program, designed to reduce carbon monoxide levels during the winter months. The CAAA currently requires the use of oxygenated fuels, at a minimum rate of 2.7% oxygen by weight, during the winter months in approximately 44 metropolitan areas that were not in compliance with carbon monoxide standards.
The demand for ethanol may also be increasing as a result of a second CAAA program, the reformulated gasoline (“RFG”) program. This program, which began on January 1, 1995, is intended to reduce ground level ozone or smog. The program initially required the use of RFG (containing oxygenates) in nine metropolitan areas with severe ozone pollution. Other less severe non-attainment areas are to be phased into the program over time. Although not required, all or a portion of 14 states and the District of Columbia voluntarily opted into the program at its inception.
The development of ethers to be used as oxygenates may provide a growth segment for ethanol. Ethers are composed of isobutylene (a product of the refining industry) and ethanol or methanol. The products are ethyl tertiary butyl ether (ETBE) or methyl tertiary butyl ether (MTBE).
In the past MTBE has been linked to ground water contamination at various locations in the East and West. Because of this link, California’s intent was to have all MTBE phased-out from its gasoline pool by December 2002. New York also had a similar intend to have MTBE usage phased out by December 2004. During this time period the Iowa Senate declared MTBE to be a threat to public health and the environment and passed a bill limiting the content of MTBE in gasoline to a maximum of 0.5%. Ethanol is the most readily available substitute for MTBE in these markets.
A potential for significant ethanol use may be its application as a feedstock for Ethyl Tertiary Butyl Ether or ETBE.
ETBE is an oxygenated fuel that can be blended with gasoline to make it burn more cleanly and thus improve overall air quality. ETBE is produced by mixing ethanol along with isobutylene, then reacting them with heat over a catalyst. The promise of ETBE is that it eliminates many of the historical impediments to the greater use of ethanol such as increased volatility of gasoline and incompatibility with gasoline pipelines. This would allow ETBE to be used at the refinery level and economically transported to areas that previously had not been able to utilize ethanol.
ETBE attains the overall goals of reducing the health impacts of motor fuel because it can utilize excess butanes in the refining industry resulting from the phase-out of lead. These butanes can be converted to isobutylene which, when combined with ethanol, produce an environmentally superior motor fuel.
Ethanol is a cost competitive feedstock for ethers currently manufactured with methanol. ETBE, because of its ethanol base, has better blending properties, thus making it superior to MTBE for both octane improvement and motor fuel volatility control. Methanol is heavily dependent on natural gas as a feedstock. Ethanol based on grain and other biomass feedstocks is renewable as well as being available worldwide. Projections suggest an increasing supply of worldwide grain surpluses in the future.
ETBE’s advantages over ethanol in a blend include its low affinity for water and low vapor pressure. Because petroleum pipelines and storage tanks contain water in various amounts, ETBE’s low affinity for water allows it to be distributed through existing pipeline systems, as contrasted with ethanol which must be shipped via transport truck or rail car. In addition, blending ETBE with gasoline reduces the overall vapor pressure of the blend thereby reducing the normal volatile organic compound evaporative emissions. ETBE is not extensively available yet commercially, and it may suffer from the same negative environmental effects as MTBE. Research to better define the properties of ETBE as it relates to the environment are in progress.
Renewable Fuel Standard (RFS)
H.R. 6 establishes the first-ever Renewable Fuels Standard (RFS) in federal law, requiring that at 4 billion gallons of ethanol and biodiesel be used in 2006, ramping up to at least 7.5 billion gallons in 2012 – with an annual increase of approximately 700 million gallons per year. The Energy Information Administration estimates the 7.5 bgy RFS will reduce oil consumption by 80,000 barrels of oil a day by 2012. EPA will be responsible for implementing and enforcing the RFS program. EPA will promulgate rules requiring refineries, blenders, distributors and importers to introduce or sell volumes of ethanol and biodiesel into commerce in accordance with the annual renewable fuels schedule. The RFS will be implemented no later than one year after the date of enactment (August 8, 2005 was date of enactment). If EPA fails to issue regulations to implement the RFS, the law contains a failsafe that requires ethanol and biodiesel to comprise 2.78% of the US fuel supply in 2006 – approximately 4 billion gallons. No later than October 31 of each year, EIA shall provide to EPA the volumes of gasoline projected to be sold into commerce in the U.S. By November 30 of each year, the EPA Administrator will publish in the Federal Register the renewable fuels obligations (to be expressed in terms of a volume percentage of gasoline sold) for each regulated entity to ensure that the RFS for the following year is met.
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Year
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Ethanol Demand
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2006
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4.0 bgy
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2007
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4.7 bgy
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2008
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5.4 bgy
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2009
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6.1 bgy
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2010
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6.8 bgy
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2011
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7.4 bgy
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2012
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7.5 bgy
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HES anticipates that the ethanol produced by the Plant will be sold in bulk to wholesale and retail distributors of gasoline and shipped to customers primarily by rail. It is believed that the Company’s ethanol will be sold into the Midwest and large coastal metropolitan markets. 
FACT: The U.S. imports 64% its petroleum needs today.
By 2025, the Energy Information Administration projects the U.S. will import 77% of its petroleum.
Dried and Wet Distiller Grains – Product Description
The dry milling process that produces ethanol also produces Distillers Dried Grains/Solubles (DDGS), which is primarily used as a medium protein animal feed. The fermentation and distillation process removes only the starch in the feedstock, concentrating the remaining nutrients. The main co-product of the production process is the distillers' grain with solubles that can be sold wet (MDGS) or dry (DDGS). Because of its moisture, MDGS is limited by freight costs to areas in the immediate vicinity of the plant. DDGS and MDGS sales account for approximately 15-18% of plant revenues. The price of DDGS generally varies with grain prices, so that an increase in grain costs are partially offset by increases in DDGS prices.
Distillers' grains are medium protein high energy feed ingredients. In the US, most DDGS are made from corn dry milling. Corn DDGS typically contains 28% protein, 10% fat, 8.5-9.5% fiber, and about 10 % moisture. They are light tan to medium brown in color and have a cereal-like texture. DDGS are an excellent source of by-pass (degradable) protein for ruminant animals (four-stomach cud chewing animals like dairy and beef cattle). They are highly digestible and enhance the nutritional properties of other feeds. They are used primarily in the feed of dairy and beef cattle as well as swine, chickens and turkeys. Modern feed formulation is a very sophisticated efficient process whereby animal nutritionists can choose from a wide variety of feed ingredients to meet the specific requirements of many different animals. Computer programs using linear programming techniques can formulate feeds to specified nutrient levels on a least cost basis.
 Ethanol, which is made from grain or other renewable natural bio-mass resources, when mixed with gasoline as an additive, can be used to power ordinary gasoline burning engines without any engine modifications. Although the percentage ratio of gasoline to ethanol may vary, the commonly used ratio is 90% gasoline to 10% fuel-grade ethanol. Ethanol became a popular additive to boost the octane level of gasoline after the phase-out of lead additives began in the 1970’s. The octane rating of gasoline with ethanol added is higher than the octane rating of gasoline without ethanol. While much of the ethanol produced is still used as an octane enhancer, its primary function is changing to use as a fuel oxygenate. Due to the higher levels of oxygen present in ethanol, ethanol mixed with gasoline in the 90-10 ratio qualifies the mixture as an oxygenated fuel. Oxygenated fuel promotes more complete combustion of the fuel and has been determined to significantly reduce pollutants, including carbon monoxide and hydrocarbon particle emissions.The so-called Arab Oil crisis of the 1970’s provided the impetus for legislative policies designed to promote the use of ethanol blended gasoline to reduce the country’s dependence on imported oil. In 1979, federal legislation was initiated that established a federal excise tax exemption and provided investment tax credits, loans and loan guarantees to promote the construction of ethanol plants for the production of fuel grade ethanol. Thereafter, the use of ethanol in gasoline increased dramatically. Domestic production of ethanol has gone from around 375 million gallons in 1983 to around 4.2 billion gallons in 2005.Recently, the demand for ethanol has increased somewhat, particularly in the upper Midwest, as a result of at least one of two major programs established by the Clean Air Act Amendments of 1990 (“CAAA”). The first program, the Federal Oxygen Program, is a recurring wintertime program, designed to reduce carbon monoxide levels during the winter months. The CAAA currently requires the use of oxygenated fuels, at a minimum rate of 2.7% oxygen by weight, during the winter months in approximately 44 metropolitan areas that were not in compliance with carbon monoxide standards.The demand for ethanol may also be increasing as a result of a second CAAA program, the reformulated gasoline (“RFG”) program. This program, which began on January 1, 1995, is intended to reduce ground level ozone or smog. The program initially required the use of RFG (containing oxygenates) in nine metropolitan areas with severe ozone pollution. Other less severe non-attainment areas are to be phased into the program over time. Although not required, all or a portion of 14 states and the District of Columbia voluntarily opted into the program at its inception.The development of ethers to be used as oxygenates may provide a growth segment for ethanol. Ethers are composed of isobutylene (a product of the refining industry) and ethanol or methanol. The products are ethyl tertiary butyl ether (ETBE) or methyl tertiary butyl ether (MTBE).In the past MTBE has been linked to ground water contamination at various locations in the East and West. Because of this link, California’s intent was to have all MTBE phased-out from its gasoline pool by December 2002. New York also had a similar intend to have MTBE usage phased out by December 2004. During this time period the Iowa Senate declared MTBE to be a threat to public health and the environment and passed a bill limiting the content of MTBE in gasoline to a maximum of 0.5%. Ethanol is the most readily available substitute for MTBE in these markets.A potential for significant ethanol use may be its application as a feedstock for Ethyl Tertiary Butyl Ether or ETBE.ETBE is an oxygenated fuel that can be blended with gasoline to make it burn more cleanly and thus improve overall air quality. ETBE is produced by mixing ethanol along with isobutylene, then reacting them with heat over a catalyst. The promise of ETBE is that it eliminates many of the historical impediments to the greater use of ethanol such as increased volatility of gasoline and incompatibility with gasoline pipelines. This would allow ETBE to be used at the refinery level and economically transported to areas that previously had not been able to utilize ethanol.ETBE attains the overall goals of reducing the health impacts of motor fuel because it can utilize excess butanes in the refining industry resulting from the phase-out of lead. These butanes can be converted to isobutylene which, when combined with ethanol, produce an environmentally superior motor fuel.Ethanol is a cost competitive feedstock for ethers currently manufactured with methanol. ETBE, because of its ethanol base, has better blending properties, thus making it superior to MTBE for both octane improvement and motor fuel volatility control. Methanol is heavily dependent on natural gas as a feedstock. Ethanol based on grain and other biomass feedstocks is renewable as well as being available worldwide. Projections suggest an increasing supply of worldwide grain surpluses in the future. ETBE’s advantages over ethanol in a blend include its low affinity for water and low vapor pressure. Because petroleum pipelines and storage tanks contain water in various amounts, ETBE’s low affinity for water allows it to be distributed through existing pipeline systems, as contrasted with ethanol which must be shipped via transport truck or rail car. In addition, blending ETBE with gasoline reduces the overall vapor pressure of the blend thereby reducing the normal volatile organic compound evaporative emissions. ETBE is not extensively available yet commercially, and it may suffer from the same negative environmental effects as MTBE. Research to better define the properties of ETBE as it relates to the environment are in progress.H.R. 6 establishes the first-ever Renewable Fuels Standard (RFS) in federal law, requiring that at 4 billion gallons of ethanol and biodiesel be used in 2006, ramping up to at least 7.5 billion gallons in 2012 – with an annual increase of approximately 700 million gallons per year. The Energy Information Administration estimates the 7.5 bgy RFS will reduce oil consumption by 80,000 barrels of oil a day by 2012. EPA will be responsible for implementing and enforcing the RFS program. EPA will promulgate rules requiring refineries, blenders, distributors and importers to introduce or sell volumes of ethanol and biodiesel into commerce in accordance with the annual renewable fuels schedule. The RFS will be implemented no later than one year after the date of enactment (August 8, 2005 was date of enactment). If EPA fails to issue regulations to implement the RFS, the law contains a failsafe that requires ethanol and biodiesel to comprise 2.78% of the US fuel supply in 2006 – approximately 4 billion gallons. No later than October 31 of each year, EIA shall provide to EPA the volumes of gasoline projected to be sold into commerce in the U.S. By November 30 of each year, the EPA Administrator will publish in the Federal Register the renewable fuels obligations (to be expressed in terms of a volume percentage of gasoline sold) for each regulated entity to ensure that the RFS for the following year is met. The dry milling process that produces ethanol also produces Distillers Dried Grains/Solubles (DDGS), which is primarily used as a medium protein animal feed. The fermentation and distillation process removes only the starch in the feedstock, concentrating the remaining nutrients. The main co-product of the production process is the distillers' grain with solubles that can be sold wet (MDGS) or dry (DDGS). Because of its moisture, MDGS is limited by freight costs to areas in the immediate vicinity of the plant. DDGS and MDGS sales account for approximately 15-18% of plant revenues. The price of DDGS generally varies with grain prices, so that an increase in grain costs are partially offset by increases in DDGS prices.Distillers' grains are medium protein high energy feed ingredients. In the US, most DDGS are made from corn dry milling. Corn DDGS typically contains 28% protein, 10% fat, 8.5-9.5% fiber, and about 10 % moisture. They are light tan to medium brown in color and have a cereal-like texture. DDGS are an excellent source of by-pass (degradable) protein for ruminant animals (four-stomach cud chewing animals like dairy and beef cattle). They are highly digestible and enhance the nutritional properties of other feeds. They are used primarily in the feed of dairy and beef cattle as well as swine, chickens and turkeys. Modern feed formulation is a very sophisticated efficient process whereby animal nutritionists can choose from a wide variety of feed ingredients to meet the specific requirements of many different animals. Computer programs using linear programming techniques can formulate feeds to specified nutrient levels on a least cost basis. |
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