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Evolving ethanol to meet challenges

Posted: Wednesday, Dec 26th, 2012


Staff Writer

ROCHELLE — In an effort to evolve with the constant changes and challenges within a $50 billion industry, Rochelle’s Illinois River Energy ethanol plant began producing and industrial corn oil on Nov. 27.

This corn oil byproduct, which is derived from the company’s ethanol-making process, can now be sold as biodiesel or a high-fat, high-energy animal feed to local farmers for cattle or pigs, thanks to the company’s recent $3.3 million investments adding a valuable co-product for the plant. The corn oil is centrifuged out a stream in the ethanol process that produces dried distiller grains with solubles (DDGS); slightly reducing the volume of DDGS the company exports through Global 3.

General Manager of Illinois River Energy, Neal Jakel, said that the corn that the plant purchases is grown within a 40-mile radius, with half of it coming from farmers and the other half from grain bins. Half of the companies in the ethanol market are now producing this DDGS byproduct. He also noted that each bushel of corn used in the ethanol production process is generated into nutrient-rich livestock feed and returns 1/3 of the bushel back to the local farming market from which it is produced.

“This is a hard time for our market, and the summer drought recently made it worse with lower corn supply,” Jakel said. “With that in mind, it’s very helpful to produce this DDGS product that has a very short payback. It bodes well for IRE’s investments and creates growth, jobs and stability for us as well as the local economy that we support.”

IRE engineering manager, Mike Van Houten, who led the construction process of this new project, agrees with Jakel.

“It’s a tough market to say the least. We’re trying to make this site as viable as possible.”

Van Houten said that the plant has become more efficient with both its water and energy supply, as it now produces combined heat and power (CHP) that produces 25 percent of the electricity used in the plant. Jakel said that 5 percent of ethanol plants produce CHP. Due to technology efficiency and improvements, the company has decreased its energy usage by 30 percent and its water supply by approximately 20 percent.

The “tough market” that both Jakel and Van Houten refer to involves the combination of increased corn prices, competition with the politically-charged oil industry circulating misconceptions with ethanol, a product that supports local industry, burns cleaner as it is a higher grade energy than oil and decreases foreign dependency.

“People don’t know that this is not a subsidized business like the oil industry,” said Jakel, adding that there is a misconception that imported sugarcane ethanol is higher grade than corn ethanol.

“Our country buys ethanol from other countries that is no better than what we produce locally.”

Ethanol produced by IRE is sold locally, including Petro in Rochelle. Jakel said that mixing the local ethanol with gasoline keeps gas prices down and also boosts its quality, as ethanol is an octane booster.

“People have a choice at the pump,” said Jakel. “Our ethanol helps keep the gas prices a little lower because we keep our ethanol price true to its value. You won’t find cheaper ethanol.”

IRE has become a large exporter of DDGS to Southeast Asia and now supplies 17 percent of Thailand’s DDGS supply alone. Some other countries that IRE exports to are China, Japan, Korea, Vietnam, Malaysia and Indonesia. Jakel said that the company will export about 90 percent of its DDGS supply, with most of that volume moving through Global 3.

“We’re faced with a lot of obstacles and it’s up to us to evolve and thrive. We have a very technical and trained staff and we are always looking for ways to increase efficiency within this facility,” said Jakel.

He said the Rochelle plant, which produces 120 million gallons of ethanol each year, keeps up with technology changes by listening to their highly-trained staff and technology providers, communicating with other companies in the industry and by participating in Renewable Fuel Association (RFA) groups.

“We’re constantly investing in optimization of facility. We’ve got to keep that edge,” he said.

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