Train or truck

[ericsp]

Here is the current situation with ethanol plants in the southern and central San Joaquin Valley. One is being built, an ethanol company has bought a grain elevator from a bankrupt feed company with plans to build an ethanol plant, and two are on the drawing board. I doubt these plants will be able to compete with all of the Midwest ethanol plants for refineries outside of California, so all of the ethanol will probably go to California refineries (along with Midwest ethanol).

Do you think the ethanol will go the the Los Angeles and Bay Area refineries in tankcars or trucks? On one hand the trip is relatively short. On the other hand there are few origin-destination pairs.

[Anonymous]

Eric,

What is the projected output of these plants? Will it be enough to fill a shuttle train once a week? Maybe even five or ten set cars? If not, I doubt carload can compete with trucks on that short of a haul.

[ericsp]

QUOTE: Originally posted by futuremodal

Eric,

What is the projected output of these plants? Will it be enough to fill a shuttle train once a week? Maybe even five or ten set cars? If not, I doubt carload can compete with trucks on that short of a haul.

I don't remember. They will be relatively small. I think I calculated about 5 to 10 cars per day. I don't remember the exact amount. None of the companies have websites yet, so I will have to find the newspaper articles to find the project capacities.

[ericsp]

Here is a link about one of the ethanol companies (Pacific Ethanol)
http://www.prnewswire.com/cgi-bin/stories.pl?ACCT=109&STORY=/www/story/05-17-2004/0002175720&EDATE=

The story is incorrect where it states Pacific Ethanol is the only one to have obtain all permits. Pheonix Bio-industries, in conjunction with Western Milling, is actually building an ethanol in Goshen, CA.

The story says the first Pacific Ethanol plant will produce 35 million gallons per year. This comes out to about 96,000 gallons per day. Assuming 27,000 gallons per car, this will be 3.5 cars per day (if all goes by rail). This has BNSF service.

Okay, Pacific Ethanol does have a website (http://www.pacificethanol.net/).

Here is a listing of ethanol plants under construction, including the one at Goshen, CA. http://www.bbiethanol.com/plant_production/usuc.html This show a capacity of 25 million gallons per year, which is about 68,000 gallons per day. Assuming 27,000 gallon tankcars, this is about 2.5 tankcars per day. It seems like this is being built in conjuction with Western Milling (http://www.westernmilling.com/). This has UP service, although San Joaquin Valley Railroad might have access to it. According to this newletter (http://www.westernmilling.com/newsletters/oct04.pdf) the plant will send the ethanol to the Kinder-Morgan terminal in Fresno for blending there. This is only about a 30 mile haul. I guess we can rule out trains for this one.

The other two proposed plants will have UP service.

[Anonymous]

i would offeer a different way of looking at the question.
25,000,000gal of ethanol at 2.68 gal/bus of corn processed would mean a little over 9,000,000 bushels of corn delivered to the plant in what would probably be 50 hopper cars per train units. this size train will deliver roughly175,000 bushels. this is one train per week. the more important question may be what kind of back haul can be arranged for the entire product mix of the ethanol plant, ie, ddg(dried distillers grains/animal feed), ethanol etc. as well as the bulk storage capacity at the plant for end product accumulation and the market distance and size of end product users in the region.

[jkeaton]

There would (or at least could) be backhaul from an ethanol plant, though - as cbt141 points out, the waste products of the ethanol process (distiller's grain/animal feed) need to go somewhere...though I expect that theses will will end up being "rubbered" to a nearby feedmill.

[ericsp]

The San Joaquin Valley has a large dairy industry. It is expected all of the distillers grain will be sold locally. I always figured that corn will come in by rail. I am trying to figure out if they will ship anything by rail.

Pacific Ethanol has a feed subsidiary. They already bring grains in by rail for feed. This facility has a balloon track and used to get 100 car unit trains before the previous owner went bankrupt. The Phoenix Bio-industries plant is being built at an existing feed mill (Western Milling) that already receives unit trains. I think 100 car unit trains will be safe to assume.

[ericsp]

Mark, do you think there is a reasonable chance the ethanol going to Bay Area or Los Angeles area refineries will go by tankcar?

[Anonymous]

One should not rule out the posibilty of a proprietary pipeline.

[ericsp]

QUOTE: Originally posted by tabiery

One should not rule out the posibilty of a proprietary pipeline.

At these capacities I think it is unlikely.

[Anonymous]

if the ethanol produced is going to amount to 2.5 tank cars per day or 15 cars per week
then equipment would need to be present and committed to the ethanol plant for this entire time....basically paid for and idling as temporary storage awaiting the arrival of power for a weekly move of less than 50 miles. these cars then need to be repositioned each and every week for the next loading and delivery. if less frequent moves of longer trains are planned then on site storage needs to be available to accumulate the ethanol produced and awaiting shippment. either way this would seem to involve a great deal of expense and / or fixed overhead. it would seem that regular arrivals of two to three trucks per day would be able to accomplish a timely takeoff of product at a much reduced cost to rail.
is there another way to look at this issue?

[Anonymous]

as an after thought:
would it not be easier for the refinery receiving these ethanol shippments to unload regular truck receipts rather than small frequent rail arrivals?
also, if the local dairy industry mentioned is anything like the livestock industry in the southeast, then the regular arrivals of truck shippments of ddg from the ethanol plant are going to be the expected method of moving the feed byproducts of the milling process.

[ericsp]

All of the ethanol plants will be along rails that already have local trains serving industries. I don't know why they would wait for a week to move the tankcars, if the ethanol is shipped by rail. When you refer to 50 miles, are you talking about the ethanol from Goshen to the Terminal in Fresno? I would be shocked if this did not go by truck. The plants are being or will be built southeast of Madera, Goshen (2), and Pixley. I will have to check how far the nearest refineries (Bakersfield) are from Pixley. They are about 70 and 125 miles respectively form Goshen and Madera. These refineries are relatively small, so any shipments to them will probably be trucks, oh joy more trucks on Highway 99 (California has trucks drive 10 to 15 MPH slower than cars, creating large traffic jams). Probably the only hope for ethanol by rail is to refineries in the LA or Bay areas.

[Anonymous]

i apologize for mistating the distances. i understood from earlier posts that the distance of haul would be 30miles. rather than speculate on all the variuos points, would it not make more sense to contact either the ethanol producer or the various end use refineries for clarification of the delivery modes?

[Anonymous]

"The San Joaquin Valley has a large dairy industry. It is expected all of the distillers grain will be sold locally. "
dairy cattle are a priority target for ddg. it will be used to replace 44% soybean meal in the feed ration at a rate of 2.5+lbs of ddg per 1lb of meal.. i would imagine that the soymeal will arrive from eastern nebraska or eastern kansas.it is also worth noting that in the NS region ddg is not a welcome cargo.

[ericsp]

QUOTE: Originally posted by cbt141

i apologize for mistating the distances. i understood from earlier posts that the distance of haul would be 30miles. rather than speculate on all the variuos points, would it not make more sense to contact either the ethanol producer or the various end use refineries for clarification of the delivery modes?

I think we have a misunderstanding. The 30 miles is correct for the Goshen plant to the Fresno terminal. As to contacting the producer, that would clarify it, however I doubt they will tell. They might not have even decided yet, espicially if they have no contracts.

[Anonymous]

well if they haven't decided yet , then how would anyone else be able to speculate on the question? they're the folks with all the details, everything we might come up with is supposition. in the end it will go by rail, truck or bucket only the guy who signs the check can say.

[ericsp]

QUOTE: The ethanol could move by rail if the tankcar is considered to be a storage device as well as a transportation device. I don't think it's possible to know what will specifically happen for each move from our superficial knowledge of the operation. Someone will figure the costs and make the appropriate decisions. I'd guess trucks from the distances and quantities involved.

I was afraid of that. Also, the routing would probably be circuitous for trains.

For the Goshen plants the local train will take the cars to Fresno. The MFRRV will take them to Roseville. From Roseville, there can be several routes
1)Roseville to Ozol (MRVOZ?). Then they would go to the refinery, or refineries, at Avon and Benicia, and possibly Rodeo/Oleum, on the local.
2)MRVOA to Oakland. Then to Richmond and possible Rodeo/Oleum on the locals.
3)MRVWC to West Colton (going back through Goshen and Pixley). MWCDO to Dolores. Local to refinery.
4)MRVWC to West Colton. Interchange with BNSF for deliver to refineries at Torrance and/or El Segundo.
From the plant in Pixley (proposed). The local would take the car to Famoso, or Bakesfield. Then they would go to Fresno.

The Madera plant is on BNSF. The local would take the cars to either Riverbank or Fresno, depending which way the switch faces. For the Bay Area refineries, I would guess a local would take them to Pittsburg for interchange or to Richmond for Chevron. I am not sure on the BNSF routing for LA area refineries.

[Anonymous]

eric,

you know an awful lot about this. i believe that if you called one of the refinery "buyers" and asked to discuss the issue with him you could fill in a lot of the blanks. if you are not a competitor they will usually take the call.