The Story of Delta Gold: Building the Biofuel Sector in the Arkansas Delta

Transcription

1 The Story of Delta Gold: Building the Biofuel Sector in the Arkansas Delta Arkansas Green Energy Network (AGEN) Rooting Wealth that Sticks October 30, 2013

2 The Why!

3 But where did it all begin??? alt.consulting started in 1998: Community Development Financial Institution 501[c][3] economic development organization working with over 320 entrepreneurs each year In 2010, Local Tipping Factors to try something different: Census: Dramatic population loss continued in Delta Few competitive business opportunities = Need for new economic driver! Exposed to WealthWorks framework by Yellow Wood Associates

4 Arkansas Delta: Assets and Challenges Rich with entrepreneurial spirit Economic base: Agriculture Most fertile farmland in the country 870,000 acres of land fallow during winter season Excellent network of two-year colleges Culture of Fried Foods = waste vegetable oil! Poverty rate > 22% Extractive agricultural economy based on commodity crops Many minority farmers and small scale farmers struggle to stay on land ADTEC renewable energy training programs can t place graduates due to lack of jobs

5 Sector Exploration Opportunity: ARRA funds flowing into state for energy related projects. Not reaching the Delta. Began with individual conversations to identify opportunities and their interest Held Arkansas Green Energy Network meetings: Value Chain Meetings March 2011 June 2011 August 2011 Solar Energy Efficiency Biofuel Biofuel value chain took on life of its own!

6 AGEN Building Blocks Leaders Farmers Entrepreneurs Investors Understanding Demand Regional Demand Valero: Needs biofuel to meet Renewable Fuel Standards Local Demand City of DeWitt: Seeking price stability and energy independence Local consumption key to profitability during ramp up

7 AGEN Building Blocks: Camelina Dr Steven Green, ASU College of Agriculture and Technology 2011: Research Camelina variety on ASU and PCCUA test plots. Winter oilseed crop for Delta: Plant in October, harvest early May Crushed into oil and Omega 3-rich meal for feed Produce biodiesel from oil and animal feed up to 10% Rotational crop for soybeans, summer vegetables

8 Micro-Bio-Refinery Dr Srikant Gir, Mid-South Community College 2011: Technology developed at Mid-South Community College as a teaching tool Small footprint can be installed in shipping container Lower cost to start and stop refinery than larger facilities Low capital investment for entire refinery installation Features: Compact Waterless Fully automated Generates ASTM certifiable fuel

9 BEST: First Generation Micro-Refinery reactor mass flow meter feedstock oil methanol sodium methylate web-interface process control metering pumps

10 Local Demand Regional Demand Local farmers and community to local refinery to Micro-Refinery meet local demand and regional customers. Camelina Oil Waste Vegetable Oil Camelina

11 Constructing Value Chain: Role of Coordinator Recruited partners to fill gaps but also meet their self-interest Build deep collaboration through value chain meetings: Build model Problem solve Tested economic feasibility of model numbers had to work!

12 Arkansas Green Energy Network Today Partner Function Self-Interest ASU Department of Agriculture Phillips Community College UofA DeWitt Campus Mid-South Community College AR Advanced Energy Foundation City of DeWitt Entrepreneur Farmers Crop research on Camelina, technical assistance to farmers Camelina research, technical assistance to farmers Build micro-refineries Policy work to support biofuel Waste vegetable oil recycling, site of chainlet Produce biofuel, produce meal from Camelina Grow Camelina, develop new production methods Demonstrate impact of their work on economic development Create local jobs for graduates, raise profile of college Commercialize technology, create new jobs for graduates Demonstrate renewable energy as economic driver Price stability, new jobs, lifting up community Build new venture Profitable winter crop with short growing season

13 Filling the Gaps Leaders Farmers Entrepreneurs Investors 1. No crushing facility for small seed crop 2. No agronomic support services for Camelina 3. Only prototype of micro-refinery exists 4. No financing for small businesses in pilot phase Engaged local investors with model benefitting local farmers and community Secured General Improvement Funds through local political support

14 AGEN Farm to Fuel Value Chain Demand for biofuel Local municipalities, school districts, farmers, truckers Regional companies - Valero, FedEx Animal Feed Composting Cosmetics Local and State Policy MSCC Mini Refinery Micro Refinery Fuel Blend /Dist Meal Gly Spring -board Diesel Gir Ener gy Angel Investors Loan Funds Waste Vegetable Oil Collection Business Trans Camelina Seed Processing Company ADTEC RET Program Sources of WVO: restaurants, convenience stores, schools, hospitals, prisons, casinos, etc. Recycle Program Growers of Camelina: Minority, Non- Minority Farmers Camelina Agronomic Service Business Mktg Strategy Edu cation promo materials Progressive Community Leadership Camelina research ASU, PCCUA USDA Support Prog

15 Local Ownership Leaders Farmers Entrepreneurs Investors Making wealth stick means local ownership and control! January 2012 AGEN Meeting Developed Ownership Models 1. Local entrepreneurs own businesses. Use own capital or secure local investors 2. Local municipality owns equipment and leases it to entrepreneurs to operate. Creates source of revenue for city. DeWitt example 3. Local farm coop owns equipment. Coop members grow crop, coop processes biofuel and sells it back to members. Arkansas County Coop example

16 Role of Coordinator in Implementation Engaged communities that had interest in using biofuel Implement value chain-let at community level Community meetings revealed local investors, farmers, and entrepreneurs Replicate the model across the region

17 Opportunities for Farmers Joined value chain in August 2012 as small scale farmer Camelina Grower Meetings in August and October 2013 Opportunity to generate income from land not used during winter months Will require cooperative effort among farmers Interest in starting agronomic services business Willard Ryland, Conserve Consultants LLC

18 Waste Vegetable Oil DeWitt has successful recycling program Mayor Ralph Relyea, City of DeWitt Adding WVO Recycling for residents Hub of 10 county waste vegetable oil recycling district Purchasing truck and tank with General Improvement Funds Sources of WVO Prisons Hospitals Schools Colleges Restaurants Convenience Stores

19 Entrepreneurial Opportunities Too risky to do this alone Value chain has laid the ground work for my business Transformed abandoned building into viable business Johnny Davis, DeWitt Bioenergy

20 Engaging Low-Income People, Businesses and Places Leaders Farmers Entrepreneurs Investors 1. Minority Farmers and Small-Scale Farmers Camelina experts provide free technical assistance from planting to harvesting, depending on the needs of farmer Guaranteed market and price for their harvest Group purchasing of Camelina seed 2. Graduates from Two-Year College Renewable Energy Program Locating value chains in towns that offer program Connect students with entrepreneurs in value chain Position students to eventually purchase businesses 3. Low Resource, Rural Communities New source of revenue, generate sales tax dollars

21 Building Multiple Forms of Capital Form of Capital Intellectual Impact Mindset shift from exporting outputs to creating more local opportunities Individual Online agri-entrepreneurship training through 2-year colleges Social Creating deep collaboration between city government, entrepreneurs, non-profits, colleges, university Built Turning environmental hazard into viable business Political Four state legislators actively supporting AGEN through GIF funds Natural Financial Cultural Regional waste vegetable oil recycling, clean fuel used by farmers and city Securing private investment for local entrepreneurs, creating new opportunities for other entrepreneurs Lifting up agricultural and entrepreneurial culture as agents for local change

22 The Alternative without AGEN Leaders Farmers Entrepreneurs Investors 1. Montana Example: Farmers grew Camelina No local processing facilities = Farmers left with large inventories of Camelina 2. Too much risk for an individual entrepreneur to do on their own 3. Only large farm could take the risk to experiment with Camelina

23 Policy: The Game Changer Renewable Fuel Standard For 2013: National Production Goal for Biomass Based or Advanced Biofuel = 4 billion gallons Required percentage standards of renewable fuel volume to nonrenewable diesel = 2.75% Leaders Farmers Entrepreneurs Investors EPA evaluates and resets standard each year Drives regional demand by fuel blenders such as Valero

24 Need for Policy Support to Promote Camelina USDA Risk Management Agency Include energy crops in crop insurance program Increase production in the Arkansas Delta by reducing farmers risk Leaders Farmers Entrepreneurs Investors USDA Natural Resources Conservation Service Reduce time and resources required to approve Camelina as a winter cover crop Additional revenue for farmers. Significant for low-resource farmers.

25 Need for Policy Support to Promote Biofuel Production US Department of Energy Permanent $1/per gallon biofuel tax incentive Encourage investment in equipment and businesses if incentive is consistent State of Arkansas Leaders Farmers Entrepreneurs Investors Biofuel Producer s Tax Credit Make fuel production sustainable even during periods of low diesel prices Better compete with surrounding states investing in renewable energy infrastructure

26 Thank you Arkansas Green Energy Network Members! Michael Henderson Graduate of PCCUA ADTEC Program Troy Hornbeck Farm owner, Camelina Farmer - DeWitt Kevin Humphrey College of Agriculture and Technology, ASU Tom Jacobs Farm owner, Camelina Farmer - DeWitt Michael Knoll Camelina Farmer and Entrepreneur - DeWitt Dr. Sunny Morris ADTEC at MSCC (retired) Steve Orlicek - Farm owner, Camelina Farmer - DeWitt Drew Pack Little Rock Branch of Federal Reserve Bank. James Phillips Farm owner, Camelina Farmer - DeWitt Willard Ryland Conserve Consultants, LLC, Camelina farmer Cotton Plant Ken Smith Arkansas Advanced Energy Association Laura Tucker USDA Rural Development Carolyn Turner Vice Chancellor, PCCUA Terry Turner Instructor PCCUA, Renewable Energy and Ag Mark Wilson Lead Instructor for Diesel Technology MSCC Kevin Vandiver - Entrepreneur Marshall Wright Arkansas Representative District 49 alt.consulting Charles Fullen, Tami Hornbeck, Deborah Temple 11 Farmers committed to growing Camelina in Winter 2013 Support: Barbara Wyckoff, Shanna Ratner Yellow Wood Associates