Ideally, your ethanol plant would be part of a farm or market-growing venture, for two reasons. First, as a grower you’d already have a familiarity with the day-to-day practices that agriculture entails. This includes working within a routine, searching for markets, dealing with equipment in both fair and inclement weather, and quite importantly, improvising when necessary to keep things running smoothly. As anyone who has worked the land can tell you, the most successful farmers are well-rounded Renaissance people who can roll with the punches and take things in stride.
Second, a working farm provides a ready-made outlet for the manufactured fuel and its by-products. Most any internal-combustion engine or heating appliances can be adapted to run on alcohol — this inventory includes tractors, trucks, pumps, generators, burners and furnaces — and the residual material from mash production contains enough nutrient to supplement normal livestock feed.
If agriculture is not in your background, it’s still possible to manufacture alcohol, even economically, provided you have a reliable source of raw material, or feedstock. There are many viable candidates for ethanol production, including both sugar and starch crops. Residues from canning and juicing operations, even far from the farm, are also distinct possibilities. Realistically, it would be difficult to carry on much more than an experimental venture in a confined space such a suburban backyard, but it’s still possible. Ideally, a rural setting or a location where there’s room to expand and function without interference would be the better choice.
Sourcing Raw Materials
Finding a reliable and consistent source for feedstock material can be a real challenge. Chapter 5 will address the distinction between sugar crops such as cane, sugar beets and fruit juices and starch-based crops such as corn, sorghum, grains and potatoes. (Visit our online store to buy the entire book.) For now, it’s enough to say that certain plants produce more starch or sugar per ton or per acre than others, and given the right cost, crops with more concentrated nutrients are the best choice.
To complicate matters, though, is the fact that the equipment needed to process the raw material varies by crop. Grain-grinding machinery is quite a bit different from the extractive equipment used to process sugar beets. Unless you can cultivate a reliable source of feedstock, it would be unwise to invest in any specific equipment. Consider, instead, renting (or leasing) that equipment if possible, or look into using the services of a local co-op.
If you live in a rural community where processing and packing houses exist, you may find that reclaiming surplus and spoilage from these operations makes the best economic sense. Approached properly, most cooperatives and private processing facilities should be willing to negotiate an attractive arrangement — a deal, if you will — that would allow you to test the value of their spoilage as a feedstock, subject to performance results over a specific period of time.
Too, you can always try making arrangements with individual farmers, perhaps in exchange for culling waste from fields and orchards, which will provide you with the needed feedstock material, at least on a temporary basis while you establish its feasibility.
Storage can be an issue with certain crops. Some products should be processed within a few months of harvest, and if they are not, they need to be dried sufficiently to store. Drying and storage come at additional cost, and are best both avoided. You will, of course, have to make some provision for containing your feedstock on a day-to-day basis to keep the operation running smoothly, especially if you plan to operate the still in batches rather than on a continuous basis.
Buy It or Build It?
For the small-scale fuel producer, many still designs are so basic that it’s much simpler and far less expensive to build the equipment rather than to buy it. This is especially true of small-capacity operations. Costly stainless steel components aren’t needed at this scale — ordinary mild steel pipe will do for the columns and water lines, and in some applications plastic piping can be used. Likewise, tanks and vats need not be anything special, but for those elements, it’s often cheaper to just buy used equipment at a farm auction (stainless steel dairy storage and processor tanks are common auction items).
If you have welding skills and a place to work, you’re way ahead of the game. For the kind of components involved, there’s no real reason to use new materials. Any salvage or metal scrap yard is likely to produce the sort of parts you’ll need. If you’re not fussy, an old oil tank can make a decent boiler vat, and similar liquid storage containers can be adapted to serve as agitated mash cookers. Many components are make-do items from other applications, so you’ll have to use a creative eye when shopping for good candidates. Unfortunately, many manufactured steel items — particularly stainless steel — have increased in value in the pre-owned marketplace because there is an increased foreign market for quality steel salvage in general and for well-made American products in particular, especially among developing nations. The plumbing parts are for the most part standard off-the-shelf items.
Paying for the services of a professional welder will increase the cost of the equipment considerably and perhaps even double it. You can trim expenses by locating all the materials yourself and preparing the parts to be fit and welded prior to delivering the job. The less the welder has to do in shaping, fitting and grinding, the less time he or she will spend on the project, reducing the hourly charge. This prep work is not a particularly high-skilled endeavor, and the investment in tools is very reasonable at this stage, so you might consider taking this approach and saving a few dollars in the bargain.
The Value of Your Time
Unfortunately for some of us, we are blessed with a desire to learn and accomplish rather than driven to make a profit. Such is the case for those working at the preliminary stages of setting up a home-scale distillery. Still, putting a lot of sweat equity into your ethanol project is a sound decision, especially for those who aren’t fully committed to the idea of making large volumes of fuel alcohol. It reduces the amount of monetary investment involved (and thus the risk) and also provides you an intimate familiarity with the equipment that you’d never experience simply by purchasing it.
Once you’re at the point of producing ethanol, you should place some value on your time, even if it is minimal. Assigning a cost per hour to your labor in collecting and processing feedstock, maintaining the distillery’s operation, and handling the ethanol product and its record keeping will allow you to honestly and accurately calculate what it costs to be independent of the normal petroleum fuel network.
Calculating Cost Per Gallon
It is not that difficult to figure out what it will cost you to make a gallon of ethanol fuel, given some degree of stability in the cost of your cooking/heating fuel and feedstock sources. In a traditional farming operation, the costs of production are well established and independent of yield per acre and market value of the crop, until it comes time to calculate the actual level of profit. (View the third image on the first page of this article for sample yields of 190 proof alcohol from different types of crops.)
The situation is similar with ethanol fuel, though many producers, particularly those working with spoilage and processing surplus, will not be concerned with crop yields other than their value in starch or sugars.
In order to keep your computation consistent, it is prudent to convert your alcohol yield to a standard proof measure, especially if you’re drawing varying proof percentages of ethanol from your still. I established in Chapter 3 how the revenue authorities calculate ethanol measure for the purposes of taxation; you should use a similar method to determine the value of your fuel. (Visit our online store to purchase the entire book.)
For example, if you’ve made 100 gallons of 185-proof ethanol in one run and 50 gallons of 190-proof ethanol in another, you can conclude that your yield is 140 gallons of 100 percent ethanol. The actual product, of course, is not that pure, but you’re simply establishing a standard common denominator you can work with for the purposes of calculation.
Once that’s established, you can determine the cost of your raw material feedstock, calculate the cost of transporting it to your work site, and subtract the value of any by-product yield, whether it’s sold as distiller’s grain or used for yourself at fair market value. This would include carbon dioxide for bottling, and any cellulosic co-products, which can be fermented to produce methane gas or dried for boiler fuel.
At this point you have a net feedstock value, for which you must now factor the cost of conversion to ethanol. The operating expenditures involved in this process include the cost of supplies such as enzymes and yeast, the cost of fuel to cook the mash and heat the distillation boiler, and the cost of insurance, licensing and any financing. These are added to the net feedstock figure to give you the cost of ethanol prior to adjustments for depreciation and other miscellaneous costs such as electricity for pumping, maintenance and repairs. Depreciation may be the cost of any leased equipment or machinery purchased, which can be extended or amortized over a given period, generally five years. Labor costs can also be considered here, though they may change with increased or decreased production.
The total fuel cost is then established by adding the adjusted costs above to the pre-adjusted cost of your ethanol to get a net cost. Dividing this figure by the number of pure ethanol gallons (not actual gallons) will give you the cost per gallon of your hard-earned product.
Beginning in 2005, an enhanced Small Producer Tax Credit became available with passage of the Energy Policy Act of 2005. Section 40 of the US Internal Revenue Code now allows an eligible small ethanol producer, defined as one manufacturing less than 60 million gallons per year, a federal income tax credit equal to $ .10 per gallon for the first 15 million gallons produced. Individual states may have other such incentives for small producers as well.
This excerpt has been reprinted with permission from Alcohol Fuel: A Guide to Small-Scale Ethanol, published by New Society Publishing, 2009. Buy this book from our store:Alcohol Fuel: A Guide to Small-Scale Ethanol.
