Ethanol The Right Time The Right Place Empire

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Ethanol: The Right Time, The Right Place Empire Biofuels, LLC Romulus, NY

Ethanol: The Right Time, The Right Place Empire Biofuels, LLC Romulus, NY

Empire Biofuels Mission: n The Mission of Empire Biofuels LLC is to improve the

Empire Biofuels Mission: n The Mission of Empire Biofuels LLC is to improve the profitability of New York agriculture by building a profitable ethanol facility to provide a clean, secure, renewable fuel source for America.

A Carbohydrate Economy n “We need to get on a path away from the

A Carbohydrate Economy n “We need to get on a path away from the fossil fuel economy. If we want to be less dependent on foreign sources of energy, we must develop new ways to power automobiles. ” - President George W. Bush, April 27, 2005 n “If future generations can count on energy in many different forms, we'll be less vulnerable to price spikes and shifts in supply. ” -President George W. Bush, March 9, 2005

n “I am committed to establishing New York as the nation’s leader in the

n “I am committed to establishing New York as the nation’s leader in the use, development, and production of renewable fuels like ethanol. Development of a biofuels industry will ensure that New York agricultural producers have profitable markets for their products and that agricultural land is kept in productive use. It will ensure jobs and economic activity, particularly in rural areas. It will harness the power of New York’s abundant natural resources, making products from renewable resources that are more beneficial for our environment. And, perhaps most importantly, it will decrease our country’s dependence on imported petroleum for its energy needs. ” - Governor George E. Pataki

Why New York? n NY is a large consumer of ethanol without an ethanol

Why New York? n NY is a large consumer of ethanol without an ethanol facility n 300+ million gallons per year are used within the state n Transportation costs provide a distinct advantage for serving the Northeast n Demand in the Northeast may reach 1 billion within 3 years n Large dairy industry to provide a ready market for distillers grains n Very strong CO 2 market in the Northeast n The state is encouraging ethanol production n NY could support several properly sized facilities

Our Products: §Produce 55 million gallons of ethanol as a safe, renewable source of

Our Products: §Produce 55 million gallons of ethanol as a safe, renewable source of fuel. §Produce 184, 000 tons of high quality distiller’s grain to sell as a high-energy livestock feed source to the state’s number one industry. §Produce 133, 100 tons of carbon dioxide to sell to the food processing industry.

Economic Impact § A 40 million gallon plant has a 169. 6 million dollar

Economic Impact § A 40 million gallon plant has a 169. 6 million dollar impact on a community. -Donald L. Van Dyne, LLC & Research Associate Professor at the University of Missouri, "Employment and Economic Benefits of Ethanol Production in Missouri. ” § Empire Biofuels will produce 55 million gallons.

A recent study found that an average 40 million gallon per year ethanol plant

A recent study found that an average 40 million gallon per year ethanol plant will have the following positive impacts on the local community: n Provide a one-time boost of $142 million to the local economy during construction. n Expand the local economic base of the community by $11. 2 million each year through the direct spending of $56 million. n Our plant is 55 million gallons Source: “Ethanol and the Local Community, ” John Urbanchuk, AUS Consultants and Jeff Kapell, SJH & Company, June 2002

Jobs §Empire Biofuels will directly employ 50 workers, not including truckers and rail employees.

Jobs §Empire Biofuels will directly employ 50 workers, not including truckers and rail employees. §Spin off and co-located businesses can generate many more jobs locally (up to 100 jobs) In Missouri, a 40 million gallon ethanol plan is estimated to generate 1, 779 jobs direct and indirectly. Donald L. Van Dyne, LLC & Research Associate Professor at the University of Missouri, "Employment and Economic Benefits of Ethanol Production in Missouri. ” § Our plant will be 55 million gallons.

CONTINUEDA recent study found that an average 40 million gallon per year ethanol plant

CONTINUEDA recent study found that an average 40 million gallon per year ethanol plant will have the following positive impacts on the local community: n Increase the local price of corn by an average of 5 – 10 cents a bushel, adding significantly to farm income in the general area surrounding the plant by improving basis which has eroded in recent years. n Increase household income for the community by $19. 6 million annually. n Boost state and local sales tax receipts by an average of $1. 2 million (varies depending on local rates. ) Source: “Ethanol and the Local Community, ” John Urbanchuk, AUS Consultants and Jeff Kapell, SJH & Company, June 2002

Impact of RFS by 2012 n Reduce crude oil imports by 2 billion barrels

Impact of RFS by 2012 n Reduce crude oil imports by 2 billion barrels n Reduce outflow of $64 billion to foreign oil producers n Increase U. S. household income by $43 billion n Create 234, 840 new jobs in all sectors of the economy

Impact of RFS by 2012 Continued n Add $200 billion to GDP by 2005

Impact of RFS by 2012 Continued n Add $200 billion to GDP by 2005 -2012 n Create $6 bill in new investment n Result in spending of $70 billion on goods and services n Purchases of feed stocks will total $43 billion

Ethanol n Ethanol industry growing n Growing outside of the corn belt n California,

Ethanol n Ethanol industry growing n Growing outside of the corn belt n California, Colorado, Ohio, New Mexico, Texas n Plans underway for plants in NY, NJ, PA, MD NC. CA, WA, AZ

Ethanol Economics n Nation Wide 2005 n Added $32. 2 billion to gross output

Ethanol Economics n Nation Wide 2005 n Added $32. 2 billion to gross output thru combination of spending annual operations and capital spending n Spent almost $5. 1 billion on raw materials, other inputs and goods and services n Supported the creation of 153, 725 jobs n Increased household income by an additional $5. 7 billion n Added more than $1. 9 billion of tax revenue

Ethanol Economics n Nation Wide 2005 n Added $32. 2 billion to gross output

Ethanol Economics n Nation Wide 2005 n Added $32. 2 billion to gross output thru combination of spending annual operations and capital spending n Spent almost $5. 1 billion on raw materials, other inputs and goods and services n Supported the creation of 153, 725 jobs n Increased household income by an additional $5. 7 billion n Added more than $1. 9 billion of tax revenue

How Much Ethanol Can Come From Corn Will there be enough ethanol for feed,

How Much Ethanol Can Come From Corn Will there be enough ethanol for feed, food, export and ethanol How much corn can go to ethanol without disrupting other markets

How Much Ethanol? n Increasing corn yields n Corn yield curve increasing at an

How Much Ethanol? n Increasing corn yields n Corn yield curve increasing at an accelerated rate n Based on the 1990 -2004 trend line, average yields are projected to hit 162 bu/acre by 2010 n Biotech hybrid technology will further accelerate the yield curve with transgenic traits offering increased drought resistance and enhanced nitrogen fixation

How Much Ethanol n Incremental Acreage Shifts n As demand for corn increases some

How Much Ethanol n Incremental Acreage Shifts n As demand for corn increases some acreage will be shifted to corn n Pro. Exporter Network projects 86 million acres may be planted to corn in 2011, an increase of 5% from the 05 -06 crop n There already projections of up to 85 million acres for 2007 n Could bring some CRP ground back into production n Price could be the incentive for corn to displace vegetables, wheat, or soybeans especially in New York

How Much Ethanol n Demand for Non-Ethanol Corn is Flat n Corn used for

How Much Ethanol n Demand for Non-Ethanol Corn is Flat n Corn used for livestock feed is not projected to increase significantly in the long term n Export use is project to be flat n It could be argued that total non-ethanol corn use is likely to flat-line at about 9. 1 billion bushels in the long term

How Much Ethanol n Improved Ethanol Efficiency n Average ethanol conversion today is 2.

How Much Ethanol n Improved Ethanol Efficiency n Average ethanol conversion today is 2. 8 gallons per bushel of corn. Just a few years ago it was 2. 5 gallons/bu of corn n Corn fiber conversion – Fiber accounts for 10% of corn kernel. Traditional ethanol process does not utilize this portion. Fermentation of the fiber can increase ethanol yield from a bushel of corn by 1013% n High fermentable starch hybrids increase yields by 3 -5%

Other Feedstocks n Switchgrass n Wheat n Willow n Woody byproducts n Reed Canarygrass

Other Feedstocks n Switchgrass n Wheat n Willow n Woody byproducts n Reed Canarygrass n This technology is 9 to 10 years away before commercially profitable n Problems – Enzyme costs

Bringing It All Together

Bringing It All Together