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A Short History and Production Statistics of the Ethanol Industry for Railfans

The US ethanol industry is the fastest growing energy industry in the world. 2.81 billion gallons of ethanol was produced in 2003 and 13.2 billion gallons in 2010.

Ethanol Production
The dry-grind process is the most common method used to produce fuel ethanol. In it, the whole corn kernel is ground and converted into ethanol. This method is relatively cost effective and requires less equipment than wet milling, which separates the fiber, germ (oil) and protein from the starch before it's fermented into ethanol. In the wet-milling process, corn is separated into its four basic components: starch, germ, fiber and protein, which are each made into different products. Besides ethanol, valuable co-products such as corn oil also are produced. However, the equipment is expensive, the process takes longer and it uses hazardous sulfur dioxide.

1999 annual ethanol production of 1.5 billion gallons was just 1% of the total fuel transportation market. Almost 80% of existing ethanol producers ship ethanol via rail. About 90% of prospective new producers indicated planned rail shipment. Rail transit times from Midwest ethanol plants to California can range from 2 to 3 weeks. Depending on the plant of origin and the market destination, typical costs range from 14 to 17 cents per gallon.

California refineries receive crude oil from two sources: waterborne deliveries by ship and domestic production from California crude oil producing fields. About one-half of the crude oil processed at California refineries comes through waterborne deliveries from Alaska or foreign imports, the other half from domestic production. Although refiners expressed concern about supply of waterborne cargoes delivered through third-party terminals, the greatest concern appears over the integrity of pipeline shipments of domestic crude oil, particularly very heavy crude oils such as from the San Joaquin Valley.

Crude oil supply processed by CA refineries (barrels per day)

Refineries depend on receiving feedstocks, blendstocks, chemicals and catalysts (e.g., ethanol, methanol, butanes, and alkylation acid) by rail car and delivering some products by rail car. About 10 percent of the California gasoline pool comes from a gasoline blendstock called alkylate. Alkylate is a high octane product of an alkylation process unit. The alkylation process unit reacts isobutane with olefin hydrocarbons (e.g., propylene, butylene) in the presence of an acid catalyst, usually sulfuric acid or hydrofluoric acid. Fresh high concentration acid is brought into the refinery by truck, rail car, or pipeline from third party suppliers. Used low concentration sulfuric acid is returned via truck or rail car for regeneration.

California's largest gasoline supplier, BP phased out MTBE and switched to ethanol in 2003. The company entered into contracts to buy ethanol from Midwest producers for its 1,200 Arco stations statewide. They represent 20 percent (2.9 billion gallons) of the 14.5 billion gallons of gas sold in California in a year.

Williams Bio-Energy LLC entered into an ethanol storage agreement with Kinder Morgan Energy Partners in late 2001 to house 15,000 barrels (630,000 gallons) of ethanol at the company’s Carson, CA facility and make ethanol available for sale to the Los Angeles and San Diego markets. Williams committed to providing a minimum of 100 million gallons of ethanol per year to California by the end of 2002. Williams will transport ethanol to the storage facility and directly to refiners via large unit rail shipments and ocean vessels.

High Plains Corp. announced it is considering expansion of all three of its production facilities. It is in the process of expanding its York, Nebraska facility from 36 to 50 million gallons per year. The company also operates facilities in Colwich, Kansas and Portales, New Mexico. During 2000, High Plains produced 67 million gallons and wants to increase this to 85 million gallons per year.

ADM has ethanol plants at Decatur, IL; Cedar Rapids, IA; Clinton, IA; Columbus, NE; Marshall, MN; Peoria, IL; and Wallhalla, ND. Total capacity is a little over one billion gallons per year as of February 2005.

The ExxonMobil refinery in Vernon, CA receives blocks of about 10 cars. These come in on regular Barstow Los Angeles manifest trains. Lomita Rail Transfer, located adjacent to Watson yard in Wilmington 18 miles south of Los Angeles, receives unit trains of either 96 or 62 cars two or three times a week. These unit trains originate at Wilmer, MN, Rock Island, IL, Galesburg, IL, Omaha, NE, or Lincoln, NE.

BNSF’s Ethanol ExpressTM unit train service delivered the 10,000th carload of ethanol from the Midwestern US to Lomita Rail Terminal on September 28, 2004. The service began in October 2003.

The gasoline you pump into your car likely started its journey from halfway around the world. It traveled via oil tanker, railway tank car and truck, as well as through several pipelines. Each mode of transport and accompanying transfer operation added to its cost.

Crude oil is drilled from porous rock deep underground in oil-rich regions such as the Middle East, North Sea, Africa and Latin America. In the United States, most petroleum is drilled in Texas and Alaska. It then is transported through land and sea by pipelines or tankers to refineries around the world. At the refinery, petroleum is first separated by distillation into gasoline, kerosene, fuel oil, jet fuel, diesel and so on. Gasoline produced by this direct distillation is called straight-run gasoline, and only a small portion of gasoline produced in the United States today is straight-run. While jet, diesel and some other fuels usually are acceptable as is, straight-run gasoline typically requires more processing, such as isomerizing, to increase octane characteristics for use in automobiles.

One 42-gallon barrel of crude oil yields more than just fuel for your car, it is a vital source of other everyday uses in transportation and industry.
Gasoline 19.5 gallons
Diesel fuel and home-heating oil 9.2
Kerosene-type jet fuel 4.1
Heavy fuel oil 2.3
Liquefied refinery gases 1.9
Still gas 1.9
Coke 1.8
Asphalt and road oil 1.3
Petrochemical feedstocks 1.2
Lubricants 0.5
Kerosene 0.2

USA Ethanol Plants as of 2010 sorted by State - Capacity is in millions of gallons per year

These are the DPU units pushing on the rear of a unit train of tank cars loaded with ethanol headed for California. For safety, there is always a loaded car of something other than ethanol between the tank cars and the locomotives.

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