Ethanol, and the unit train vs carload conundrum

[rrandb]

QUOTE: Originally posted by RRKen

QUOTE: Originally posted by oltmannd

The other day, I heard the automakers say that they think the way forward for reducing reliance on petroleum is ethanol and that the current bottleneck is distribution. They hinted that the gov't could help in this regard, but there were no specifics.

Were they suggesting the gov't back construction of ethanol pipelines?

Last I looked, the only supply problem was in Texas where the contractor did not estimate how long it would take to unload. Supply backed up, litterally back to Ashton, Iowa, who held 25 loads in their plant for about a week.

This will help in Dallas / Ft. Worth region. [2c]http://www.bnsf.com/media/news/articles/2006/06/2006-06-05a.html

[RRKen]

QUOTE: Originally posted by oltmannd

The other day, I heard the automakers say that they think the way forward for reducing reliance on petroleum is ethanol and that the current bottleneck is distribution. They hinted that the gov't could help in this regard, but there were no specifics.

Were they suggesting the gov't back construction of ethanol pipelines?

Last I looked, the only supply problem was in Texas where the contractor did not estimate how long it would take to unload. Supply backed up, litterally back to Ashton, Iowa, who held 25 loads in their plant for about a week.

[jsanchez]

The class 1 I work for is happy to have both the single car and unit train business, both have grown tremendously this year. (ADM utilizes both methods of shipping ethanol) The margins are actually better on a single car hazmat shipment of ethanol, I think GPS tracking can help improve cycle times on the smaller shipments as has been proven for other types of single car shipments.

Jim

QUOTE: Originally posted by PNWRMNM

I think the shortline president likely got misquoted. I am sure that he and the Class I connections would prefer unit trains but it is clear the customers can not handle them today. The railroads can not force a square peg into a round hole. The question should be "What is the future of this business?"

Ethanol is relatively light so IIRC cars will be about 30,000 gallons and 100 tons net. These cars will cost about $70,000 each or $700 per month. Shippers and consignees may use the tank cars as storage but they will be much more expensive than in plant fixed storage tanks. The railroad will quote rates either with mileage payment or without. This makes the railroad indifferent to car cycle time. Whoever supplys the cars will not be indifferent, however.

Taking the figures from the article, I doubt that anyone will want to wait 10 days to accumulate a unit train and switch 10 car cuts to do it. On 100 cars that is 1000 car days or 33.3 car months. At $700 per month someone spent over $21,000 in car cost just sitting around at origin.

I think the railroads will offer block rates on 10, 20, or 25 car blocks and unit trains. Producers, marketers and users will size their facilities as they will and pay the rate for the service they choose. In short, I do not think the railroads are going to force anyone to do anything. They will offer choices and customers will choose.

Take anything in any press with a grain of salt.

Mac

[rrandb]

The oil companies / pipeline companies will build the pipelines once it is here to stay. That said both the ethanol producers and pipeline companies will gladly take all the help / incentives / tax breaks they can get from who ever will give it to them. A potentially bigger problem at the moment is we are unable to produce enough ethanol domestically to supply 10% of the gas we use. They will need to import foreign ethanal to make up the defict.

[oltmannd]

The other day, I heard the automakers say that they think the way forward for reducing reliance on petroleum is ethanol and that the current bottleneck is distribution. They hinted that the gov't could help in this regard, but there were no specifics.

Were they suggesting the gov't back construction of ethanol pipelines?

[SALfan]

QUOTE: Originally posted by jeaton

RRKen Quote: "Ethanol cannot run via pipelines of any sort, unless that pipeline is dedicated to only ethanol and no other product."

Question: Is it Is it necessary to have a special grade of steel or some sort of lining to hold ethanol in a pipe, rail tank car or storage tank or is it the ethanol/gasoline blend that is the problem? I suppose it could also be another problem. I understand that a petroleum product pipeline will handle different products using various colored dies to mark the transition from one product to another. Does the problem have to do with the possibility of ethanol straight or from a blend contaminating other products that follow?

Thanks for your comments.

In addition to ethanol attracting water, it is corrosive and solvent in a different way from petroleum products. If a pipeline has been used for years for petroleum products, deposits have built up that the petroleum won't dissolve. It is possible or probable that the ethanol WILL dissolve those deposits, thereby contaminating the ethanol or ethanol mix being transported.

[rrandb]

Weren't there also plan to use some of there waste product to generate the heat to produce the heat. Co-mingling the waste with regular fuel. While current waste is sold as a feed product they hoped it would be better used to stoke the boilers. [?] As always ENJOY

[ericsp]

QUOTE: Originally posted by jeaton

QUOTE: Originally posted by Murphy Siding

QUOTE: Originally posted by RRKen
Those plants will have the advantage of co-gen energy , which will give them a slight advantage to single plant locations.

What does co-gen energy mean?

I'll take a stab at that Q. It is making productive use of energy, usually in the form heat, that would otherwise just go out to the environment.

In other words, recovery heat that would otherwise go up the stack.

In the cited case, use is probably being made of heat that is either generated by the reactions in the production of other products or is left over from heat used in making other products.

Genearlly, there has to be a fairly convenient place to use the excess energy. That is why about the only use made of the excess heat generated by a railroad locomotive is to warm up the sandwich packed for lunch.

You are on the right track, pun intended. Co-gen, short for cogeneration, is using the steam, generated in the steam generator, to run the turbines, then using it as process steam, in this case for cooking the mash. In addition to process plants, this is common in enhanced oil recovery (EOR).

It has been too long since thermodynamics. I forgot that integrated gas combined cycled (IGCC) power plants are considered cogeneration plants also (although I still do not remember learning that in class, perhaps it is not universally accepted). An IGCC plant is one that uses the exhaust heat from the gas turbine (Brayton cycle) to generate the steam for the steam turbine (Rankine cycle).

[rrandb]

With the phasing out of MBTE and it replacement by ethanol this should be a boon to most railroads that are able to handle the additional capacity. Whether its unit trains for major cities or one car for Fred and Ethal's fuel rack every one of them is going to need 10% of the amount of gasoline they sell to be ethanol. Since it will not be by pipeline, and barges can only go so far, the majority of it will travel as far as it can by rail. [2c] As always ENJOY

[RRKen]

QUOTE: Originally posted by rrandb

The largest difficulty in receiving the tank trains may well be rail access to the tank farms(i.e. fuel storage facilities). If unit trains can get there they should be able to unload their capacity as they are used to recieving 100's of thousands of gallons of product at a time thru their pipelines. They just are not used to it arriving by rail. I wonder how long it takes to unload a unit train of tank cars into tank trucks?[?] As always ENJOY

Prior to it's phase out, MTBE was also shipped to some racks via rail. In addition, other additives that are used in some marketers blends arrived by rail. In this area, the rack was served by Iowa Traction, and every once in a while they would spot tanks out there for summer blend.

Right now, the solution has been in smaller markets, to utilize team tracks and transload ethanol to trucks for the trip to the rack. Richmond, VA, and Baltimore utilize CSX's Trans-Flow terminals for this. Texas was ill-equipped for any of this, and is still building a large facility in Midlothean to service all of the Ft. Worth area.

In Chicago, Kinder Morgan now has two terminals to unload rail, one is the former GATX terminal in Argo (CN), the other in South Chicago via NS.

[jeaton]

QUOTE: Originally posted by rrandb

One of the problems with ethonal is it blends readilly with both gasoline and water. There are traps that catch water etc. in these piplines and help prevent it from contaminating the gasoline. The ethanol sucks it all up and mixes it with the product even when blended at only 10%. It is also considered corrosive. [2c] As always ENJOY

Oops! Forgot about that mixing with water thing. Maybe just as well. That first sip off a really "dry" martini would put one on the floor.[:D][:D][:D]

[MichaelSol]

QUOTE: Originally posted by PNWRMNM

If you want to know what BNSF is really doing, go to thier webiste and select Markets, Agricultural, Ethanol. It opens a page that touts a 95 car "Ethanol Express". At the top of the page is a link to Single Car Rates, which in fact gives both single car and unit train rates. You can print them out and study them minutely if you wish.

Evidently there is no demand for block rates as I previously speculated. Funny how the facts quell speculation.

BNSF quotes single car rates, 30-94 cars if gathered from no more than three plants, and 95 cars and up.

[rrandb]

One of the problems with ethonal is it blends readilly with both gasoline and water. There are traps that catch water etc. in these piplines and help prevent it from contaminating the gasoline. The ethanol sucks it all up and mixes it with the product even when blended at only 10%. It is also considered corrosive. [2c] As always ENJOY

[jeaton]

RRKen Quote: "Ethanol cannot run via pipelines of any sort, unless that pipeline is dedicated to only ethanol and no other product."

Question: Is it Is it necessary to have a special grade of steel or some sort of lining to hold ethanol in a pipe, rail tank car or storage tank or is it the ethanol/gasoline blend that is the problem? I suppose it could also be another problem. I understand that a petroleum product pipeline will handle different products using various colored dies to mark the transition from one product to another. Does the problem have to do with the possibility of ethanol straight or from a blend contaminating other products that follow?

Thanks for your comments.

[rrandb]

Yes and each fuel rack/tank farm must be able to receive enough ethanol to equal 10% of all the gasoline they dispense. It is replacing the MBTE that is being phased out. Virtually none of these facilities are set up to receive any rail cars much less unit trains. At best the tank cars/ barges will need to transfer to a lot of rubber tired tankers at some point to reach the fuel racks all over America. [2c] As always ENJOY

[RRKen]

QUOTE: Originally posted by rrandb

The largest difficulty in receiving the tank trains may well be rail access to the tank farms(i.e. fuel storage facilities). If unit trains can get there they should be able to unload their capacity as they are used to recieving 100's of thousands of gallons of product at a time thru their pipelines. They just are not used to it arriving by rail. I wonder how long it takes to unload a unit train of tank cars into tank trucks?[?] As always ENJOY

Albany, NY, which transloads to barge mostly, can unload 100 cars in 24 hours. Same with Watson, CA which BNSF serivces.

Here is the catch, if ethanol is sent to a tank farm, where the truck rack is, fine, if not it has to be hauled to the rack itself for blending. Ethanol cannot run via pipelines of any sort, unless that pipeline is dedicated to only ethanol and no other product.

Since Iowa has no refineries, we get all our product via pipeline. Each rack along the pipeline blends the gasoline at that location while loading it into the trucks, including ethanol.

[RRKen]

QUOTE: Originally posted by jeaton

RRKen

On my long post, I suggested that a 100 million GPY plant in the middle of the corn belt could find enough corn growing in a 10 to 15 mile radius of the plant to meet annual needs. Even if a plant could buy the closest corn, there is still the matter of storing the crop until consumed. That suggest the possibility of a small shuttle rail movement from storage to plant. Just generally from your observation, where is the corn coming from and how is it shipped in?

Farmer has grain in bins, also takes grain to county elevator who either is agent for ethanol plant, or has a bulk contract with them to deliver. This all depends on if the ethanol plant is a co-op, or limited partnership with producers owning shares, or not. Producer/owners require them to sell a certain quantity to the plant at the going rate and time proscribed.

In the case of Golden Grain in Mason City, the farmer will sell to the ethanol plant, and haul it to a Five-Star Co-op location, and Five Star will then truck it to the ethanol plant when needed. Farmers may use a semi, tractor and bins, or grain truck to get it to the co-op. Five-Star uses semi's from the elevators to the plant. Almost no grain comes from outside the Five-Start area of elevators. And with all that, they (Five Star) still loads unit trains for other uses such as Gulf export or Chicken farms (Tyson), as well as, yes, ADM (they are loading 75 cars today at Rockwell on the old M&St.L).

[RRKen]

QUOTE: Originally posted by Murphy Siding
Originally posted by RRKen
Those plants will have the advantage of co-gen energy , which will give them a slight advantage to single plant locations.

What does co-gen energy mean?

[chicagorails]

EXXON today, ADM tomorro.
thus the rub.......

[Murphy Siding]

QUOTE: Originally posted by beaulieu

QUOTE: Originally posted by Murphy Siding

QUOTE: Originally posted by RRKen
Those plants will have the advantage of co-gen energy , which will give them a slight advantage to single plant locations.

What does co-gen energy mean?

In this case ADM generates steam from the heat and has turbines to generate electricity with the steam.

Bummer![:)] I was hoping someone was trying to *cook* ethanol using coal. Now that would make sense to me.

[beaulieu]

QUOTE: Originally posted by Murphy Siding

QUOTE: Originally posted by RRKen
Those plants will have the advantage of co-gen energy , which will give them a slight advantage to single plant locations.

What does co-gen energy mean?

In this case ADM generates steam from the heat and has turbines to generate electricity with the steam.

[greyhounds]

http://www.bnsf.com/media/news/articles/2006/06/2006-06-05a.html

[jeaton]

QUOTE: Originally posted by Murphy Siding

QUOTE: Originally posted by RRKen
Those plants will have the advantage of co-gen energy , which will give them a slight advantage to single plant locations.

What does co-gen energy mean?

I'll take a stab at that Q. It is making productive use of energy, usually in the form heat, that would otherwise just go out to the environment.

In other words, recovery heat that would otherwise go up the stack.

In the cited case, use is probably being made of heat that is either generated by the reactions in the production of other products or is left over from heat used in making other products.

Genearlly, there has to be a fairly convenient place to use the excess energy. That is why about the only use made of the excess heat generated by a railroad locomotive is to warm up the sandwich packed for lunch.

[Murphy Siding]

QUOTE: Originally posted by RRKen
Those plants will have the advantage of co-gen energy , which will give them a slight advantage to single plant locations.

What does co-gen energy mean?

[PNWRMNM]

If you want to know what BNSF is really doing, go to thier webiste and select Markets, Agricultural, Ethanol. It opens a page that touts a 95 car "Ethanol Express". At the top of the page is a link to Single Car Rates, which in fact gives both single car and unit train rates. You can print them out and study them minutely if you wish.

Evidently there is no demand for block rates as I previously speculated. Funny how the facts quell speculation.

Mac

[rrandb]

The largest difficulty in receiving the tank trains may well be rail access to the tank farms(i.e. fuel storage facilities). If unit trains can get there they should be able to unload their capacity as they are used to recieving 100's of thousands of gallons of product at a time thru their pipelines. They just are not used to it arriving by rail. I wonder how long it takes to unload a unit train of tank cars into tank trucks?[?] As always ENJOY

[jeaton]

RRKen

On my long post, I suggested that a 100 million GPY plant in the middle of the corn belt could find enough corn growing in a 10 to 15 mile radius of the plant to meet annual needs. Even if a plant could buy the closest corn, there is still the matter of storing the crop until consumed. That suggest the possibility of a small shuttle rail movement from storage to plant. Just generally from your observation, where is the corn coming from and how is it shipped in?

[RRKen]

QUOTE: Originally posted by MP173

rrken
Thanks for your input on this subject. You not only work for UP but you study the industry you work for and your customers.

I work for an industry which supplies products for railcars, particularly tank cars. Those folks are really excited right now. Tank car manufacturers are looking at big production over the next several years, partially thanks to ethanol.

A customer of mine is lADM. A recent conversation with my contact indicated that:
A. They are building 1billion gallons of manufacturing capacity.
B. They will be purchasing 2500 tank cars in the next 3 years.


rrken...do you know where the new ADM plants are going to be located?

ed

Cedar Rapids, Iowa and Columbus, Nebraska. Each will be dry mill types with nameplate capacity of 275 mmg/y. Those plants will have the advantage of co-gen energy , which will give them a slight advantage to single plant locations. ADM by the way is the only producer to own it's own cars, not leased like the other marketers.

[MichaelSol]

QUOTE: Originally posted by Murphy Siding

QUOTE: Originally posted by MichaelSol

QUOTE: Originally posted by edblysard
We do switch out a lot of single..as in 1 car...

QUOTE: Originally posted by edblysard
Oh, and Dave, the days of one and two car load railroading by the class 1 roads is gone...been gone for quite a while.

QUOTE: Originallyt posted by RRKen
The reality is right now, it is not that way. When I look at a list of cars billed out, I see lots and lots of singles. Out of 215 last night, none were units, none.

An interesting turnaround ....

Correct me if I'm wrong, but Ed doesn't work for a class 1/

No, he doesn't, that's why it was interesting to contrast his comments on what Class I's are doing with someone who actually does work for a Class I.