- LA DNR - Technology Assessment Division

This chapter presents a summary of a number of fuel ethanol from grain engineering and economic assessments. The cases come from a number of public sources and check with each other surprisingly well for such a wide variety of locations and economic situations. The results are summarized in graphical form in Figure II and in tabular form in Table XIV. These cost analyses have all been updated using 1986 Louisiana corn prices and 1986 distiller's dried grain (DDG) prices. The costs associated with the alcohol plants have been updated to 1986 dollars using the detailed CE plant cost indices published in Chemical Engineering magazine. No actual, confidential, or private data are used. The largest number of points are from an August, 1986, U.S. Department of Agriculture (USDA) report Fuel Ethanol and Agriculture: An Economic Assessment with actual 1986 corn and DDG prices substituted for 1985 prices. The cost in the USDA report are for corn dry milling plants with ethanol assumed to be the principal product (see the section on corn milling / alcohol plants). The results of two very detailed engineering analyses for large ethanol only plants are also included. Louisiana has two plants of similar size currently under construction.

The following are detailed design cases which were carefully updated were a 46-million-gallon-per-year case prepared for Battelle Columbus Laboratories by F.C. Schaffer of Baton Rouge. The 46-and 50-million-gallon per-year plants show alcohol costs which are 6 to 7 percent lower than the USDA plants. This is remarkably close agreement when the variables involved and the different approaches and source of the analyses are considered. The author would expect the alcohol only from corn plants to be somewhat less expensive than a dry-milling alcohol plant. A dry-milling corn processing plant is capable of doing quite a bit more with its feedstock than a plant built only to produce beverage or fuel alcohol from corn (see the section on corn processing from the McGraw-Hill Encyclopedia of Science and Technology).

The early fuel alcohol plants in Louisiana were sugarcane molasses-based plants. These are the least expensive fuel alcohol plants of all to build but they operate on a severely limited feedstock. Molasses-based fuel alcohol plants are virtually exclusive to the state of Louisiana in the U.S. and public domain analyses of this type of plant are extremely difficult to find. Historically the Louisiana sugarcane industry has year in and year out produced enough molasses to make 14.4 million gallons of anhydrous ethanol. This has made Louisiana molasses very expensive at times and forced many of the early alcohol plants to install grain-based equipment as there simply was not enough molasses to go around as the percent Louisiana feedstock requirements rose in steps to 100 percent. Most of the new alcohol capacity and modifications coming on line in the future are grain based, so grain-based plants are what are analyzed in this chapter.

Figure II
Table XII
Table XIII
U.S. Department of Agriculture
Corn Dry-Milling Plants
Plant Operating Costs

These cases were taken from Fuel Ethanol and Agriculture: An Economic Assessment by the U.S. Department of Agriculture (USDA). Table XII is Table 9 from the report and Table XIII substitutes the l986 Louisiana corn feedstock prices and l986 distillers dried grain (DDG) prices. Table XIII values are those plotted in Figure II to give consistent l986 Louisiana based values. The USDA figures are for actual dry-milling grain plants operating mostly in the midwestern corn belt. The ROI used by USDA is l5%. These l985 analyses are the most up to date of all the analyses available and are used in this report.

	U.S Department of Agriculture Costs with 1986 Grain Prices Table XII, Dry Milling
	U.S. Department of Energy, South Point Ethanol 60-Million Gallon Per Year Fuel Ethanol Plant, Operator's Analysis of An Actual Operating Plant, Septmeber, 1986
	Batelle Labs/F.C. Schafer, Table XIV, Dry Milling
	- Solar Energy Research Institute/U.S. Department of Energy, Table XVI, Dry Milling
	Kansas Energy Office, Table XVIII, Dry Milling
	- Pace Petrochemical Service - 1986 Annual Issue, Dry Milling
	Ibid., Wet Milling
	Octane Week, July 21, 1986 "Pro Forma Costs," "current corn prices'", Dry Milling
	Ibid., "higher (capital) costs ... which plant at a serious competitive disadvantage" Octane Week
	Renewable Fuels Association (RFA) Analysis of the USDA Fuel Ethanol Report, Dry Milling
	Ibid., Dry Milling
	Ibid.,Wet Milling
	Ibid.,Wet Milling

	Shepard Oil (initial actual)
	Agrifuels
	Biomass Processors
	Mississippi River Alcohol
	Shreveport Ethanol
	Smithfield Fuels
	St. Joseph Ethanol
	South Point Ethanol (Name plate)
	South Point Ethanol (87% steam factor)
	Pace (Dry Milling)
	Pace (Wet Milling)
	Octane Week (Average Cost)
	Octane Week (High Cost)
	Bioenergy Directory (Wet Milling)
	Bioenergy Directory (Wet Milling)
	Bioenergy Directory (Wet Milling)

TABLE XII
Cost per Gallon of Ethanol, Corn Dry-Milling Plants, 1985

Cost	Ethanol plant size (million gallons per year)
	10	20	40	60	80	100	120
	1985 Dollars per gallon
Energy	0.26	0.26	0.26	0.26	0.26	0.26	0.26
Other Direct	.17	.11	.08	.08	.06	.06	.06
Indirect	.25	.18	.13	.13	.11	.11	.11
Capital Recovery	.71	.58	.49	.45	.42	.40	.38
Feedstock¹	1.02	1.02	1.02	1.02	1.02	1.02	1.02
Byproduct Credit²	-.31	-.31	-.31	-.31	-.31	-.31	-.31
Total	*$2.10*	*$1.84*	*$1.67*	*$1.63*	*$1.56*	*$1.54*	*$1.52*

¹Assumes a corn price of $2.35 per bushel plus $0.20 transportation costs and a yield of 2.5 gallons of ethanol per bushel.

²Assumes distillers dried grain price of $92 per ton and 16.8 pounds of distillers dried grain per bushel of corn.

Source:

FUEL ETHANOL AND AGRICULTURE: AN ECONOMIC ASSESSMENT, U.S. Department of Agriculture

TABLE XIII
Cost per Gallon of Ethanol, Corn Dry-Milling Plants
Using 1986 Corn and Distiller's Dried Grain Prices

Cost	Ethanol plant size (million gallons per year)
	10	20	40	60	80	100	120
	1986 Dollars per gallon
Energy	0.26	0.26	0.26	0.26	0.26	0.26	0.26
Other Direct	0.17	0.11	0.08	0.08	0.06	0.06	0.06
Indirect	0.25	0.18	0.13	0.13	0.11	0.11	0.11
Capital Recovery	0.71	0.58	0.49	0.45	0.42	0.40	0.38
Feedstock @ $2.25 Per Bushel	0.90	0.90	0.90	0.90	0.90	0.90	0.90
Byproduct Credit $132/Ton of DDG	-0.44	-0.44	-0.44	-0.44	-0.44	-0.44	-0.44
Total	*$1.85*	*$1.59*	*$1.42*	*$1.38*	*$1.31*	*$1.29*	*$1.27*

TABLE XIII - A (Addendum)
Capacity, Capital Cost, and Dollars per Annual
Gallon of Fuel Alcohol Plants in Louisiana

CURRENT PLANTS (06/03/85)	FEEDSTOCK	CAPACITY gal Ethanol/ Year MM=Million	CAPITAL COSTS M=Thousand MM=Million	DOLLARS/ GALLON of Annual Capacity
Shepard Oil (Jennings)	Molasses	17.0 MM	$25 MM	$1.47
Ethanol Producers (Patoutville)	Molasses	3.0 MM	$350 M (sic)	-
{Authors note: A total of twelve plants built; none have been started up}	Molasses	{1 MM x 12 plants}	{$1.75 MM each}	{$1 75}
PLANNED PLANTS*
Agrifuels (New Iberia)	Molasses	32.0 MM	$100 MM	$ 3.13
Biomass Processors	Grain	2.0 MM	$5.3 MM	$ 2.65
Miss. River Alcohol Company (Myrtle Grove)	Grain	42.0 MM	$ 64 MM	$ 1.52
Shreveport Ethanol (Robson)	Grain	4.5 MM {2.0 MM Actual}	$ 3 MM	$ 0.67
Smithfield Fuels (Port Allen)	Molasses	1.5 MM	$300 M**	$ 0.20**
St. Joseph Ethanol (St. Joseph)	Grain	3.0 MM	$6.0 MM	$ 2.00
** This plant was proposed to be mostly used equipment from Colorado as per Mr. Tony Ball 4/18/85 in testimony to the Legislature. They were also in the market for used equipment from old Louisiana sugar mills.

* "Known plants with capacity production ability in 1987."

Source:

Louisiana Legislative Fiscal Office Report, Gasohol and the Louisiana Economy, 06/03/85

TABLE XIII - B (Addendum)
Capacity, Capital Cost, and Dollars per Annual
Gallon of Fuel Alcohol Plants in the United States

U.S. PLANTS	FEEDSTOCK ($2.50/bu on average)	CAPACITY gal Ethanol/Year MM=Million	CAPITAL COSTS MM=Million	DOLLARS/ GALLON of Annual Capacity	COMMENTS
South Point Ethanol South Point, Ohio	Corn	63 MM (Nameplate) 55 MM (87% Stream Factor)	$ 95.2 MM	$1.51/gal $1.73/gal	Operating analysis of an actual operating plant for DOE September 1986.
Pace Petrochemical Service - 1986 Annual Issue	Corn	60 MM	$ 94.0 MM* (Dry Milling) $142.0 MM* (Wet Milling)	$1.57/gal* $2.37/gal*	August 1986 Analysis
*Octane Week*, 6/21/86, p.10	Corn	60 MM	$ 100 MM	$1.67/gal
*Octane Week*, ibid.	Corn	50 MM	$ 150 MM	$3.00/gal	"higher cost...which puts plant at a serious competitive disadvantage". *Octane Week*
International Bio- Energy Directory And Handbook - 1984	Corn Corn	10 MM 50 MM	$ 40.4 MM $111.0 MM	$4.04/gal $2.22/gal	Wet Milling Wet Milling
1982 dollars adjusted to 1986 dollars using "CE Plant Cost Index"; a 0.96% increase.	Corn	100 MM	$176.7 MM	$1.77/gal	Wet Milling

*Note:

The manufacturing cost for the more expensive wet milling plant is actually less than for the dry milling plant. See Figure II.

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