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Cellulosic Technology— Pulp and Paper Style

By Chris Hanson | June 26, 2013 API’s demonstration plant in Thomaston, Ga., uses its stand-alone AVAP technology. PHOTO: AMERICAN PROCESS INC Though a relative newcomer to the ethanol world, Georgia-based American Process Inc. is no stranger in the forest products industry. The company has demonstrated its consulting expertise in 500-some projects, logging more than 2 million work hours of project experience in nearly two decades. Founded in 1995 by Theodora Retsina as an engineering consulting firm, API has been increasing its presence in the cellulosic ethanol market with its bolt-on and stand-alone technologies utilizing woody biomass and crop residues to produce cellulosic sugars. In 2006, API began investing its own funds into developing two technologies for cellulosic sugar production. Kim Nelson, vice president of governmental affairs at API, says the move was spearheaded by the need to keep the forest products industry thriving and viable. “We were consultants to the pulp and paper industry,” Nelson says, adding that it’s fairly unusual for consulting firms to develop their own processes. “Most of our employees at the time had advanced degrees in pulp and paper science engineering, biomass chemistry, wood chemistry, etc. If they did not have those advanced degrees, they had worked in the industry for many years. So we had this great understanding of the existing processes, and in handling, treating and extracting biomass. So it was kind of a unique resource that we had and took advantage of.” Bolt-on Conversion API’s GreenPower Plus and AVAP (which was originally developed as American value-added pulping) technologies are utilized to extract sugars that may be used to produce biofuels and biobased chemicals from a variety of feedstocks. The GreenPower Plus technology first treats biomass, including hardwood, softwood or bagasse, through a hot water extraction process. The hemicelluloses are removed from the wood in this process and then treated with acid to form sugars. Last, the sugars are concentrated until it can be converted into biochemicals or fermented into cellulosic ethanol by organisms able to process C5 and C6 sugars.  Any residual solid material containing lignin and cellulose is then processed to create pellets, combusted in a boiler or used for pulp and paper applications. Retsina, CEO of API, describes GreenPower Plus as a bolt-on technology for plants that are already aggregating biomass, such as a first-generation sugar-to-ethanol plant. Basil Karampelas, president of API, says one of the main benefits of using GreenPower Plus is it upgrades a portion of the biomass to a higher value product at a capital cost of less than $10 per annual gallon of capacity. “We are only taking the hemicellulose fraction of the biomass, which is typically 20 to 25 percent,” Karampelas adds. “Whatever we’re not using goes back to the original user. You have the possibility to generate cash flow from that 25 percent that could be approximately equal to the cash flow from the burning of the other 75 percent of the biomass in the boiler or pelletizer.” Currently, API’s GreenPower Plus technology is being demonstrated at the Alpena Biorefinery in Alpena, Mich. Co-located at the Decorative Panels International hardboard facility, the refinery began operating in the second quarter last year utilizing a DPI waste stream of woody biomass extract. It has a nameplate capacity of 894,000 gallons of cellulosic ethanol and 696,000 gallons of potassium acetate per year. The project was named a Center of Energy Excellence and a Renewable Energy Renaissance Zone by the state, and awarded $22 million in 2010. Stand-alone Technology AVAP is API’s stand-alone technology that converts biomass into sugars for cellulosic ethanol or biochemical production. It uses sulfur dioxide and ethanol pretreatment chemistry to extract hemicelluloses and lignin, Nelson explains. The lignin and hemicelluloses are processed by autohydrolysis. The hemicellulose is used to produce sugars while the lignin is transported to a boiler to generate energy for the facility. Meanwhile, the separated cellulose is either sold as a coproduct or is processed through enzymatic hydrolysis to produce cellulosic sugars, which can be converted along with the hemicellulose sugars into biochemicals or biofuels such as cellulosic ethanol. On the AVAP technology, Retsina says it “takes any biomass, it is completely feedstock agnostic, and converts all the biomass to fungible intermediate feedstock, which is sugars. Those cellulosic sugars can be converted to chemicals and fuel on site or shipped to another site and dropped into another operation.” API set up an affiliate in 2011, AVAP Co. LLC, to commercialize the AVAP technology it uses at its demonstration plant in Thomaston, Ga., which came online in May. “With any first-of-its-kind facility,” Karampelas says, “we’re anticipating there will be different things we’ll be doing to tweak and optimize as we start up, which is what we did with Alpena.” The plant can handle a variety of feedstocks at rates up to 10 tons per day, with an annual capacity of about 300,000 gallons per year. He mentions one way API is optimizing the site in Thomaston is by relocating API’s corporate R&D capabilities onsite. “AVAP is a technology that will fractionate the entire biomass and in doing so it gives us a lot of optionality around what we can ultimately produce,” Karampelas says. He then clarifies that since the technology is fractionating the feedstock into cellulose, lignin and hemicelluloses, the plant can decide to skip the cellulose-to-glucose conversion stage and use the separated cellulose to produce coproducts, such as fluff pulp, while using the hemicellulose sugars for biochemical or biofuel production. “Our plan for both Thomaston and Alpena for the remainder of 2013 is to really perfect and optimize the two technologies at the demo facilities,” Karampelas says.  API was not prepared to share any specific yield estimates, since yield values are dependent on the feedstock and configuration, which can vary from site to site, he adds. In addition to API’s sugar extracting technologies, it has developed two energy management software tools for the pulp and paper industry. Energy Targetter is used to identify energy consumption problems, track performance of projects and improve energy efficiency. The Performance Indicator Benchmarking program is a Web-based tool that utilizes data from mills in the pulp and paper industry to help users benchmark their steam, water, electricity and thermal energy consumption. API’s newest software, apiMax, is a biorefinery simulator developed in 2009 for industries such as cellulosic biofuel and biochemical, pulp and paper and pellet production. API’s website notes 30 companies and 13 institutions are using or evaluating the program that can simulate biorefining and energy equipment. Brazilian Boost API recently got a boost when the Brazil-based biotech company, GranBio acquired a 25 percent equity stake in API, giving the company access to API’s cellulosic sugar technologies. “The association with a demonstrated cleantech leader such as GranBio strengthens American Process and makes it possible to aggressively grow our business,” Retsina said in a press release about the agreement. “We believe that the production of low-cost clean sugars is key to unlocking the potential of biomass as a versatile feedstock for fuels, chemicals and products. We are actively partnering with ‘sugar converters’ to complete the supply chain and convert the sugars to high-value-added products. We are excited and very optimistic about the prospects of building the first commercial-scale plant with API technology in Brazil followed by one in the United States.” Karampelas views the deal as mutually beneficial for both API and GranBio. “The way it benefits API is we’ve got a partnership with a world-class company based in South America, specifically Brazil, where we see tremendous potential for both of our technologies,” he says. He adds that by working with GranBio, API may gain insight in attracting international customers interested in using cellulosic sugars to produce their products. He says the relationship will help GranBio gain more exposure and a better understanding of API’s home market of North America. Author: Chris Hanson Staff Writer, Ethanol Producer Magazine 701-738-4970 chanson@bbiinternational.com Continue reading

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15 Questions To Ask Before Purchasing Farmland

Friday, May 31, 2013 WASHINGTON — The increase in crop and livestock prices have generated significant profits for many farmers, which some are using to buy additional land. Growing demand has driven land values to record highs in many areas. Whether farmers are using cash or borrowing money, buying land should include a well-researched financial plan. “Farmers should consult their banker throughout the land buying process, to ensure decisions made today best position them to prosper and obtain credit in the future,” said John Blanchfield, senior vice president of agricultural and rural banking at ABA . “When it comes to buying land, you cannot spend too much time researching all of the contingencies.” Given current market conditions, ABA’s Agricultural and Rural Bankers Committee , made up of leading agricultural bankers in the country, has developed the following recommendations for buying farmland: • What is your business’s financial condition? Consider needed investments, expected expenditures, and crop conditions to determine if buying land is the best use for your cash. Are there other opportunities that can provide a better return? • Have you created a pro-forma cash flow? Research sales trends and expected revenue of a potential plot of land to determine how well the purchase fits within your plan. Does the potential return meet your objectives? Your banker can help you develop this essential planning tool. • Given your revenue forecast, are you overpaying? If you are paying a premium, how long will it take you to recoup? Determine how much your business should prudently spend on a land purchase and the revenue needed to justify your purchase and stay within those targets. • Have you thought long and hard about it? Never be rushed by a broker and never confide your best price or financial goals with a party working for the seller. Don’t buy impulsively or make a deal before visiting the property numerous times. Rework the standard broker’s purchase contract with your lawyer, deleting what you don’t like and adding what you want, before presenting the offer. • Does it make more financial sense to rent the land rather than owning it? Rental rates are high, but renting frees your cash for other activities. What will be your total land payment per tillable acre owned and how does this compare to cash rents in your area? • Should you go all in with your cash? Talk to your banker about alternatives to using all cash in the transaction. Land is an illiquid asset and purchasing it will impact your farm’s liquidity. Your banker can work with you to structure a loan that will enable you to acquire the land you need while preserving some of your working capital for necessary expenditures. • How much land are you acquiring? Sounds simple, but many times there is confusion about how much land is actually being purchased. Know exactly what you’re getting before making a bid. See if the land has been surveyed and make sure it matches the details of the offer. If the land has not been surveyed, work with your attorney to determine the acreage based on the legal description or consider having the land surveyed and determine who will pay for it. Make sure that there are no special easements tied to the land. If there are, make sure you spend time studying them and understanding them completely. • What does the land appraise for? Are there some comparable sales in the area? Appraisals are expensive, but they are the best way to establish value. Even if you do not get a full appraisal, attempt to find some comparable sales to determine if the purchase price is reasonable. • What is the soils story? What is the capability of the soil you are buying and how does this impact your revenue forecast? Good soil is paramount. Know the type of soil you’re buying and the history of annual crop rotation. Any seller should be more than happy to provide you with a soil’s profile and information about past farming practices. • What is the water source? Is the property irrigated? Do the water rights convey with the property? Adequate water is essential to establishing the value of the property. Account for water cost in your financial plan to ensure this cost doesn’t negatively impact your return. Make sure all water wells are registered with the appropriate authorities. Each state has its own water laws so make sure you are familiar with the state that you are doing business in. • What do you know about the gas, mineral, and wind rights for the property? Do these rights convey to you as the purchaser? Have they been surveyed or severed from the surface rights? Are they currently under lease? If so, under what terms? Have a thorough knowledge of property rights, as mining and drilling can have an impact on surface and water quality, access to the property, and the viability of the farm or ranch. • How is the property zoned? Will your plans for the property conflict with existing zoning restrictions? Are there conservation easements that could restrict use of the property? This factor has a significant impact on your valuation of the property, particularly if your plans conflict with current zoning restrictions. Make sure that you understand the assured leases that may go with the property — many of the states in the west have a large percentage of their ground that falls into this category (bureau of land management, forest service, state land, national grass land). • How will you hold deed in the property? Will you own it individually, jointly with a spouse, in a family owned entity (corp., LLC, LLP) or in a trust? The pros and cons of how you own the land will depend on your long term goals. • Are there any environmental problems? The last thing you want to buy is a costly environmental problem. Paying for an onsite environmental audit before you buy the land may be worth the cost and will help ensure you are not buying into an expensive cleanup. • How long will you actively farm? Make sure your financing plan matches the rest of your intended career as an active producer. Will you fully retire all debt from the acquisition before you retire? Do you have sufficient life and disability insurance? Continue reading

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