by Bob Schultheis Natural Resource Engineering Specialist

1. Environmental Impacts ofan Ethanol Plant in theMissouri Ozarksfor2007 NACAA AM/PICGrand Rapids, MIJuly 17, 2007 byBob SchultheisNatural Resource Engineering Specialist

2. Why the Rush for Ethanol? • $3 per gallon gasoline • Demand for greater energy security • Concern over relying on oil imports from politically volatile regions • Those opposing ethanol are branded as “unpatriotic” or “supporting terrorism” • Growing worries about CO2 contributing to “global warming” • Methane & nitrogen oxides (NOx) are much bigger contributors • Income for grain farmers & petroleum companies

3. Basics of Ethanol Production • Ethanol is an alcohol made by fermenting grain and other carbohydrates • This is an old process which traditionally has been used to produce ethanol for use as a beverage • 97% of U.S. ethanolis made from corn

4. Ethanol Conversion Factors • Corn – dry mill = 2.75 gallons/bu = 98.21 gal/ton(4.2 T/ac. = 150 bu./ac. = 410 gal./ac.) • Corn – wet mill = 2.65 gallons/bu = 94.64 gal/ton • Grain sorghum = 2.70 gallons/bu = 96.43 gal/ton • Wheat = 2.80 gallons/bu = 93.33 gal/ton • Barley = 1.40 gallons/bu = 58.33 gal/ton • Sugarcane = 19.50 gal/ton(35 T/ac. = 680 gal./ac.) • Sugar beets = 24.80 gal/ton • Molasses = 69.40 gal/ton • Raw sugar = 135.40 gal/ton • Refined sugar = 141.00 gal/ton

5. Wet Milling Process Starch Ethanol HFCS Corn Germ Bran Gluten Steepwater solubles Corn Oil Corn Gluten Meal Germ Meal Corn Germ Meal Corn Gluten Feed

6. Dry Milling Process Corn Ethanol Stillage Thin Stillage Wet Distillers Grain Condensed Distillers Solubles A bushel of corn will produce ~2.75 gallons of Ethanol, 17 lbs of CO2 and 17 lbs of DDGS Wet Distillers Grain with Solubles DDGS

8. Environmental Considerationsof Ethanol Production 1 • More acreage being put into corn • Marginal land has lower yields & generally has higher erosion rates • Sediment concern in water ways • Nitrogen use for corn production • Marginal ground doesn’t utilize fertilizer as well causing higher potential for nutrient runoff and leaching • U.S. nitrogen sources = Russia, Trinidad & Tobago • Made from foreign oil & natural gas

9. Environmental Considerationsof Ethanol Production 2 • Atrazine runoff concerns • Whether in water or attached to soil, atrazine use for weed control has higher potential to runoff into water bodies • If not wisely managed in targeted watersheds,it may be banned in all watersheds • Water demand • Growing the corn = 1450 gallons per 1 gal. ethanol(600,000 gal./ac./season ÷ 150 bu./ac. ÷ 2.75 gal./bu.) • Making ethanol = 3-5 gallons per 1 gal. ethanol • Air emissions of the ethanol plants

10. Environmental Considerationsof Ethanol Production 3 • High P, K and S content of DDGs as feed • Ethanol cannot be transported by pipeline • Truck fuel use & air emissions to transport it • Underwriters Laboratories (UL) has not issued safety approval for E85 pumps • Is U.S. ethanolreplacing foreign oilor domestic oil?

11. Economic Considerationsof Ethanol Production • $.51/gallon federal excise tax credit • 5.1 cents/gallon for 10% blend • Government tax incentives used since 1978 to make ethanol competitive with gasoline • $.54/gallon federal tariff on imported ethanol • States may also offer incentives • Missouri = $.20/gallon producertax credit on first 12.5 milliongallons

12. Economic Considerationsof Ethanol Use • E10 = negligible MPG loss • 3% less energy per gallon than gasoline +2.5 points higher octane rating • E85 = 15-20% MPG loss, depending on driving habits and terrain • 27% less energy per gallon than gasoline +13 points higher octane rating • Only select vehicles can burn E85 • Flex-Fuel Vehicles or FFVs built mostly after 1999 • Corrosion-resistant stainless steel gas tanks andTeflon-lined fuel lines

13. U.S. Gasoline Usage, 1986-06 Source: U.S. Energy Information Administration

14. Ethanol Production, 1980-06 Source: Renewable Fuels Association

15. Gas & Ethanol Production, 1986-06 Source: U.S. Energy Information Administration

16. U.S. Gasoline Usage • Mandating 10% ethanol in all gasoline would require that nearly half of the U.S. corn crop be processed into ethanol • If all U.S. corn were made into ethanol, it would produce 31 billion gallons per year • To replace all U.S. gasoline would require78.6 billion bushels of corn annually Source: FAPRI 2006

17. Webster CountyGroundwater Impact Committee(Appointed 8/23/06 by County Commission, dissolved 11/18/06) Bob Schultheis - Natural resource engineering specialist Marshfield, MO (Committee Chair) Larry Alberty - Fordland area businessman Fordland, MO Karen Asher - Seymour area farmer Seymour, MO Joe Blaine - Soil scientist Seymour, MO Joyce Noland - District technician, Webster County SWCD Marshfield, MO

18. Proposed Gulfstream Bioflex Energy ethanol plant site is in James River Basin Watershed of southwest Missouri Map source: www.dnr.mo.gov/env/wpp/watersheds/info/ws-11010002.htm

19. Equivalent Residential Demand 880 GPM water = 21,000 persons @ 60 GPD 10,000 KwH = 5,100 houses @ 1400 KwH per month

20. Webster County Demographics • 7th fastest growing in population in Missouri • 35,500+ people in 2006 • 12th lowest (out of 114 counties) in per capita income • Pasture-based livestock production • 2nd in Missouri for dairy cows • 5th in Missouri for hay production • Almost no grain production • No planning and zoning regulations • Second-highest elevation in the state • Residents rely entirely on drilled wells for water • Groundwater recharged by precipitation

21. Geology of Missouri

22. Geology of SW Missouri

23. 1495 ft. 1675 ft. 1525 ft. Geology ofWebsterCounty Marshfield “Top of the Ozarks” Starting point for 5 rivers in Missouri Seymour Rogersville

24. Geology of Ethanol Plant Site

25. Karst Regions of the U.S.

26. Pollution Risk Areas

28. “Losing streams” leak water underground in unpredictable directions with little or no filtering

29. Sinkholes are direct conduits forsurface water to travel underground

30. Solution Channel

31. Proposed site: NE¼ of Section 15, Township 28N, Range 19W in Webster County, MO

32. Soils are wet-natured due to a restrictive layer approximately two feet below the surface.

33. Gulfstream Bioflex Energy, LLC • New corporation located in Mt. Vernon, MO • Privately owned; not a farmer cooperative • One of partners is in the petroleum trucking business • No previous experience with ethanol • Building contractor expertise is community buildings & Branson theaters • First engineering firm quit because they were not getting paid • Conflicting information from the partners

36. GBE Reasons for Site Selection • Yes • Lay of the land • Proximity to a natural gas pipeline • Easy access to railroad & four-lane highway • Can ship corn cheaper than shipping ethanol • 90% of grain arrive by rail, 10% by truck • No • Large livestock industry in southern Missouri • “Planning and zoning never came to mind”

37. GBE Ethanol Plant Estimates1 Inputs 194 rail cars per week (data from GBE) 3,500 bushels per rail car 2.70 gallons of ethanol per bushel 4.84 gallons of water per gallon of ethanol 17.0 pounds of DDGs per bushel of grain 24 hours per day of operations 50 weeks of operation per year 10,000 KwH electrical demand, if no gas used(data from GBE)

38. GBE Ethanol Plant Estimates2 Outputs 97,000 bushels of grain processed per day 825 tons of DDGs produced per day 261,900 GPD of ethanol produced 1,833,300 gallons of ethanol produced per week (data from GBE) 76 rail cars per week @ 24,000 gal. each 1,267,600 GPD of water required per day 880 GPM of water (data from GBE) 47 acre-inches of water per day (if irrigated)

39. Water Law in Missouri • Riparian water doctrine • Landowners are allowed to take all the water they want as long as they leave a reasonable amount for everyone else • “Reasonable” is determined by decision of lawsuit filed in circuit court • “Citizens for Groundwater Protection” sued to stop GBE • Circuit court ruled in favor of GBE • Case is currently being appealed

40. Possible well locations to give2000-foot separation distance

43. Static water table Cone of depression Existing wells Initial cone of depression Long-term cone of depression High-capacity well

44. What Happens to Discharge Water? • Unclear from GBE how much water will be discharged • 880 GPM = 47 acre-inches per day • Soils will hold total of 3.5-5.0 inches of water • Annual precipitation and evaporation are nearly equal • Rest must be discharged to drainage-ways or irrigated • How much will recycling concentrate the discharge water? What’s in it?

45. Equivalent Conversions • 880 GPM water = 21,000 persons @ 60 GPD = 3,520-unit housing development @ 6 people per house = 808 acres @ 10,000 sq.ft. per lot • 10,000 KwH = 5,100 houses @ 1,400 KwH per month • 825 tons DDGs/day = 550,000 head of cattle @ 3 lbs. fed per day = 3,790 acres of feedlot @ 300 sq.ft. per animal

46. Other Considerations • Noise from hammermills & dryers • Light pollution • Odor • Air emissions • EPA rule change on 4/12/07 increased allowable levels from 100 tons/year to 250 tons/year) • Safety from explosion and fire • Traffic on Highway 60 and railroad

47. Property is in two school districtsand two fire districts

48. Predominant wind direction forApril-September is from SSE to NNW

49. Will the Jobs Help the County? • 200-300 outside workers during construction • 35-45 employees @$35,000+/year= $2.1 million annual payroll • Rail car loading/unloading • Scale operators for weighing trucks • Laboratory personnel • Clerical workers • Will all employees live in Webster Countyand buy here? • No revenue to county government due to 11/05 property tax levy rollback for sales tax

50. Summary – Big Picture Questions • Is ethanol from corn sustainable? • Does it reduce energy needs fromforeign sources? • Would the site pass an environmentalimpact study? • Are natural resourcesavailable to support a plantwithout damaging others? • Can the plant be convertedto cellulosic ethanol?