Ethanol 101 for the Gasoline Retailer SIGMA Annual Meeting November 11, 2006 Chicago, IL Jim Redding Aventine Renewable Energy, Inc
4500 4000 3400 2810
1770
3000
4000
4500
5000
2006 2005 2004 2003 2002 2001
1999
2000
1470 1998
1630
1400 1997 1996 1995
1100 1400
1993
950
1990
1991
Year
1994
2000
1350 1200
900
1989
1992
870
1988
1100
845
1987
1984
1986
430
1983
710
375
1981
1982 215
1980
350
1985
1000
610
830
1500
2130
Margin Enhancement 2500
1300
0
175 500
Oxygenate 3500
Millions of gallons
Historical Ethanol Demand
MTBE Replacement
Federal Energy Bill
Renewable Fuel Standard
4.0 4.7 5.4 6.1 6.8 7.4 7.5
Billion Billion Billion Billion Billion Billion Billion
2006 2007 2008 2009 2010 2011 2012
Ethanol Demand by PADD 6,000
5,100 5,000
Ethanol Production PADD II 4.5MM
4,000
MM Gallons
4,000
3,000 2,500 2,100
2,000 2,000
1,350
1,000
800 500 200
150
0 PADD I (East Coast)
PADD II (M idw est)
PADD III (Gulf Coast)
Current Ethanol Dem and
PADD IV (Rocky M ountain)
Projected Ethanol Dem and 10%
PADD V (West Coast)
Markets & Distribution System Will Change
Aventine’s Current Distribution System
Pekin Facility Aurora Facility Alliance Partners Terminals
Over 1,435 rail cars under long-term lease 1 ocean-going & 13 inland river barges on time-charter 14 production sites and 51 terminals Extensive blending system with 35 million gallons of capacity
Access to West, East, and Gulf Coast
25 years of development
Effects of the RFS on Ethanol
Creates market demand for ethanol 101 operating plants – capacity 4.8 billion 37 under construction – capacity 2.2 billion 7 expansions – capacity .3 billion 20 states will have plants Logistics becomes crucial Markets will be further from the Midwest Overall freight costs will increase Rail car utilization will be key
Effects of the RFS on Ethanol
MTBE will disappear Which opens up new markets East Coast Gulf Coast Ethanol Imports will increase in 2006 Plants will be built outside the corn belt Final rules for RFS implementation are critical
Ethanol 101 for the Gasoline Retailer
Retail Unit Consideration Investigative/Preparatory Conversion Program Maintenance
Ethanol 101 for the Gasoline Retailer Investigative/Preparatory Verification of materials compatibility. Tank, Tank Liners, Submersible pumps Investigation for history of water problems & corrective action. Check for tight seals on fill caps & proper water run off from covers. Install rain caps on tank vent lines. Removal of water bottoms. Check tank for excessive tilt & remove any pocketed water from low tank end. Clean tank bottom if tank age & product history necessitate.
Ethanol 101 for the Gasoline Retailer Investigative/Preparatory Equip each pump or dispenser with a 10 micron filter. Issue alcohol compatible water finding paste. Sargel, Kolor Kut Procure proper pump labels for ethanol blends, if required. New octane decals if necessary. Obtain and understand the proper accounting guidelines to be used at the time of conversion.
Ethanol 101 for the Gasoline Retailer Conversion Options Remove all product from the tank and replace with gasoline/ethanol blend. Order enough extra ethanol in the initial delivery to accomplish upgrading of existing inventory. Lower inventory to extremely low levels and merely begin delivery of gasoline/ethanol blends.
Ethanol 101 for the Gasoline Retailer
Conversion Before initial delivery retest tank bottoms for water. When the initial load arrives, follow normal delivery procedures. It is recommended that pumps be shut down during initial delivery. After the initial delivery is dropped run a few gallons of product through each dispenser to ensure it is clear and blight.
Ethanol 101 for the Gasoline Retailer Conversion Conversion loads should fill tank to 80% capacity. If a second load is required this should be done shortly after the initial delivery. During the first forty-eight hours after delivery, tanks should be tested for water bottoms and/or phase separation once every eight hours. If equipped with an automatic inventory measurement system and water detection device, you should still utilize a tank gauge stick and water finder paste as an added precaution.
Solid Contaminant Standards
Clean
1
Slight Particulate Matter
2
Particulate Matter
3
Dirty
4
Moisture Content Standards
Bright
A
Hazy
B
Cloudy
C
Wet
D
Ethanol 101 for the Gasoline Retailer Conversion Unless there is a problem with the integrity of the tanks or lines, you should not experience any water build up after the conversion. Since ethanol loosens varnish like deposits in the tank, you may need to change pump filters once or twice shortly after your initial conversion. It is recommended that pumps/dispensers be recalibrated approximately two weeks after the conversion.
Ethanol 101 for the Gasoline Retailer Ongoing Maintenance
Once through the initial two week conversion period, you should notice no difference in your day to day operations, except for the need to check for water on a daily basis.
Lessons Learned
Have a Tactical Implementation Plan Volumetric measurement of ethanol should be performed using API Table 6B Require inspection and removal of any water bottoms from third party terminal tanks Inspect as many Retail outlet USTs as possible Train retail operators on proper housekeeping Plug overfill drains at retail outlets
Typical Properties of Ethanol Oxygen wt. % Octane (R+M)/2 Research Octane Motor Octane Density (lb../gal. @ 60 F)
35.0 112.5 129.0 96.0 6.58
Ethanol’s Estimated Octane Blending Values Base Gasoline Octane Upgrading Potential by Blending Ethanol 4.50
Potential Octane increase
4.00
4.00
3.56
3.50 3.00
3.17
3.08
2.83
2.74
2.50
2.54
2.44 2.28
2.30
2.18
2.11
2.03
2.00
1.96 1.81
1.96 1.77
1.62
1.50
1.62 1.45 1.31
1.20
1.00
1.51 1.12
1.86
1.82
1.82
1.44
1.40
1.40
1.06
1.04
1.04
0.50 0.00 83
84
85
86
87
88
89
90
Base Gasoline (R+M)/2 10%
7.70%
5.70%
91
92
93
Takeaways
Proper conversion of existing tanks to ethanol blends, will make it a “NonEvent”. Monitor tank bottoms daily with water/ethanol finding paste. Be proactive on maintenance to keep the system water free.
Conversion of Existing Facilities to E-85
Steel tanks ok Fiberglass tanks must be UL rated for 100% ethanol Clean the tank Dispenser must be retrofitted 1-2 micron dispenser filters Alcohol compatible hose and nozzle
Note: Anything compatible with methanol is ok for E-85
Metal Compatibility with E-85 Compatible
Non Compatible
Unplated Steel Stainless Steel Black Iron Bronze Nickel Plate
Zinc Brass Lead (& lead alloys) Aluminum Terne Plate Copper
Non-Metals – Compatibility with E-85 Compatible Teflon Nitrile Viton Polypropylene Buna-N Neoprene Rubber Thermo Plastic Pipe Thermoset Reinforced Fiberglass
Non – Compatible Natural Rubber Cork Leather Polyurethane PVG Some Plastics/ Thermo Set Plastics
Codes & Standards
NFPA Codes 30 and 30A Federal Spill Prevention Control & Counter Measure
(40CFR Part 112)
Any State Spill Regulations State and Local Fire Codes Product Delivery Laws Hazardous Material regulations
Potential Funding Sources
EPACT 2005 Tax Credits
State Grants/Credits
National Ethanol Vehicle Coalition
Clean Cities Coalitions
Safety & Firefighting
MSDS Emergency action plan Advise local fire department For large fires – AFFT/ACT fog or foam For small fires – CO2 halon, dry chemical (B,C,BC or ABC)
Additional Info Sources
AFDC (DOE) E85 Tool Kit
http://www.eere.energy.gov/afdc
NEVC
http://www.e85fuel.com
ASTM
http://www.astm.org
RFA
http://www.ethanolRFA.org
Aventine Renewable Energy, Inc
Jim Redding Phone (309) 347-9310 Fax (309) 346-0742 E-mail
[email protected] Web Page www.aventinerei.com